The unemployment rate has remained steady at 9.6% for the past 3 months, but November brought different results with an increase to 9.8%, according to a report [.pdf] released today from the Labor Department. The private sector added 39,000 jobs during November, whereas government employment declined 11,000 jobs – resulting with a gain of 28,000 jobs.
Despite this seemingly positive gain of jobs, keep in mind that the unemployment rate excludes individuals who have not been actively looking for a job within the past 4 weeks, which are known as “discouraged workers.” There was an increase of 63,000 discouraged workers during November. This is the fourth consecutive month the amount of discouraged workers increased. Moreover, since November 2009, the number of discouraged workers has risen from 861,000 to the current level of 1.282 million. In other words, there has been an increase of 421,000 discouraged workers in the past year.
While there was an addition of 63,000 discouraged workers in November, this influx is not the reason why the unemployment rate rose. The reason why unemployment rose to 9.8% is a result of seasonal adjustments. In the past, employment in November rises higher than 28,000 jobs, due to businesses typically adding employees for the holiday season. Businesses did not hire as many employees as they have in the past, thereby resulting with the rise in the unemployment rate. For instance, retail employment took a particularly large hit in November with a decline of almost 30,000 jobs. This does not mean that 30,000 people in retail were laid off in November, but is instead a reference to the lack of hiring that is atypical for this time of the year.
Lastly, November is the 19th consecutive month in which the unemployment rate has been above 9% – the worse streak of unemployment since the Great Depression.