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Chris Low: November numbers ‘nothing I’ve seen before’

Mitchell Hartman Dec 2, 2011

Chris Low: November numbers ‘nothing I’ve seen before’

Mitchell Hartman Dec 2, 2011

Mitchell Hartman: American employers hired 120,000 new workers in November, according to the Labor Department. And the unemployment rate unexpectedly fell from 9 to 8.6 percent– that’s the lowest rate in 2 1/2 years.

Chris Low joins us live, he’s chief economist at FTN Financial in New York. Good morning, Chris.

Chris Low: Good morning, Mitchell.

Hartman: So if we’re adding 120,000 or  130,000 jobs month after month now– that’s pretty good, isn’t it?

Low: You know, actually it is. It’s a really decent improvement over the lack of job growth we’ve seen earlier this year, but as Ben Bernanke, Fed chairman, keeps reminding us, it’s not good enough if we want to make a significant dent in the tens of millions of unemployed. Still, better than in was.

Hartman: And in fact, I know the revisions have been suggesting that we may even be creating slightly more jobs.

Low: That is exactly right, yeah.

Hartman: So what explains, though, the big decline in the unemployment rate? It’s not every month we see it fall so much. You might expect if we’re seeing it fall that sharply we’d be creating about 300,000 or 400,000 jobs a month — which we’re obviously not.

Low: Well, yeah, there’s actually two things going on here. One of them is that the unemployment rate comes from a different survey, so the 120,000 jobs a month, that was from something called the payroll survey, it’s a survey of employers. There’s also a household story, where they’re contacting the workers themselves.

And that one shows slightly different results. In the last four months, in fact, it shows significantly faster job growth and if that’s all you knew about the economy, in fact, you would think the economy was booming. The average is more than 300,000 jobs a month in the last four months. But it also measures the labor force, that is, the number of people who are actively looking for work. In November, we saw something that I have never seen before. That is, 275,000 people say they found jobs, and at the same time 315,000 people said they became so frustrated they stopped looking for jobs.

Hartman: Wow, that is not as good as it sounds at the top of the news cast here. Chris Low at FTN Financial in New York, thanks very much.

Low: Thank you.

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