First, the good news: The U.S. labor market continued making modest gains in November as private employers added 140,000 jobs and the unemployment rate fell 0.4 percentage points to 8.6 percent. Evidence of a strengthening jobs situation is reinforced by upward revisions to the number of new jobs added by employers in September and October, which were 72,000 jobs higher than initially measured. Households also reported an additional 278,000 people working in November, which could be due to a higher-than-usual number of new firms being created.
That said, this month’s Labor Department report raises concerns about whether we can build on the momentum we’re seeing. For one thing, about half of the declining unemployment rate was due to workers exiting the labor force. Government budget austerity is still hurting job creation, and workers’ assessment of labor market conditions as well as employers’ confidence in their business outlook evident in the data do not bode well for future hiring.
These concerns should be reason enough to spur Congress to action, overcoming political obstructions to job-creating legislation. But with Europe’s currency union troubles, which threaten to spiral out of control and spill into the U.S. economy, the impetus to act is even more pressing.
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