In what surprised economists, the unemployment rate for November went down to 8.6% from a stubborn 9%. This is the lowest unemployment rate since March, 2009 and two months after President Obama took office. The unemployment figure has been hovering around 9% for 2.5 years.
The start-ups and small business that were skittish about hiring additional employees are finally beginning to hire. This is a trend that we hope will continue, while adverting a double-dip recession which many can not afford. The stock market also loved the news, sending it to a weekly gain of 865 points or 7.7%!
Small businesses, defined as those with 500 or fewer workers, employ almost half of the private sector. They generate about two of every three jobs in the economy since the mid-1990’s, making this latest surge in hiring suggest an upward trend in our economy.
In the U.S., about 13.3 million people remain unemployed. Private employers added 140,000 jobs in November, while the government sector lost 20,000. More than half of the jobs added where by retailers, restaurants and bars. So are we shopping more, eating more and drinking at a record pace? Maybe. But, higher paying jobs in the engineering, an accounting and high-tech industries also rose which suggest a rebound of sorts.
Yet, an estimated 300,000 people stopped looking for a job and are not counted in this figure. The underemployment rate, those who have given up looking for a job and those working part time that want full-time jobs, fell from 16.2% to 15.6 %. Our economy isn’t close to replacing the 8.7 million jobs lost since the beginning of the Great Recession when it cut jobs for 25-months straight.
People also are not getting raises. Average hourly pay slipped 2 cents last month to $23.18. Also inflation is rising faster than most economists expected. Look closely at your grocery bill and you will see a marked increase from a few months ago. It is costing us more to live and wages just are not keeping up. Our economy has grown at a 2% annual rate in July-September. Experts believe that this growth will peak at 2.5% for the also three months of the years and settle in at 1.5% growths next year.
So, things are certainly looking better for those unemployed. It appears that small businesses are beginning to spend money which will move this economy forward. I believe we are on an upward track in hiring, yet for many they will have to find a new career since they may not be able to get back into the job market doing what they did before the recession.
Also, be prepared for a spike in inflation that will continue for years. Enjoy the prices now and load up on items, for inflation is knocking on our door, and it’s about to knock it over!