STEVE INSKEEP, HOST:
It's MORNING EDITION, from NPR News. I'm Steve Inskeep. Good morning.
Let's try to figure out what today's latest unemployment figures mean. Here are the basics: The Labor Department said this morning the unemployment rate dropped unexpectedly to 8.6 percent for the month of the November. That's better than expected. In fact, it's the lowest number for an unemployment rate in two-and-a-half years. Here are the underlying numbers: In a separate survey, the government says 120,000 more jobs were created than lost in November. The pickup in business hiring was offset by some layoffs in government, but still broadly an improvement.
NPR's Yuki Noguchi is here to tell us more. Yuki, good morning.
YUKI NOGUCHI, BYLINE: Good morning, Steve.
INSKEEP: OK, 8.6 percent sounds good to start with, or it sounds like an improvement. Let's say that. It's still a pretty high unemployment rate.
NOGUCHI: It is, but it's a pretty big drop. The unemployment rate has stayed at about 9 percent all year, so it's pretty much the most significant movement we've had all year. The other thing is that job growth for the previous two months was actually revised upwards. So that means that things have actually been better since the summer than we thought.
INSKEEP: OK. So things are - and there have been a number of these revisions over the last several months. But let's look a little more closely at this. Eight-point-six percent is an improvement. But 120,000 more jobs, as we've been told in the past, is actually not that much many more jobs compared to what the economy needs, because the population continues to grow. How did that happen?
NOGUCHI: Well, you know, we've see the labor force participation decline. And it's not really clear what the 8.6 percent unemployment rate means. It looks good and it sounds good, but it's not good if it's lowered just because there are fewer people in the labor force - meaning people who are working or looking for work.
INSKEEP: OK. So, fewer people are searching for work. That is part of the picture here in this past month?
NOGUCHI: Yeah, that's right. The labor force participation rate declined from 64.2 percent to 64 percent. So...
INSKEEP: OK. Several hundred thousand fewer people actually looking for work. Some people gave up or moved their lives in a different direction.
NOGUCHI: It's possible. Yeah.
INSKEEP: Now, when you look at all the numbers together, can you get an impression from this one month that things are, at least, moving in a positive direction?
NOGUCHI: No. You can't look at this and say this is the moment when everything gets better because - precisely because of these revisions. You know, there are a couple of positive things in this report. One of them is retail hiring. But, you know, how many of those jobs will actually stick around after the holiday season is - you know, it's not clear. I mean, if spending continues, that could lead to more long-term hiring. And that's what some economists hope.
INSKEEP: But Yuki, I want to ask this thing: Some people will have heard, early this morning, a report from you in which you compared the monthly unemployment reports to the movie "Groundhog Day": the same thing over and over and over again, month after month, around 9 percent. Now we've kicked below 9 percent. But it is this month different enough that it seems perhaps to be breaking that "Groundhog Day" pattern, at least for now?
NOGUCHI: I think the answer is no, because if you look at the underlying numbers, the hiring in business was about 140,000 net new jobs. And that's pretty consistent with what we've seen all year. So while the unemployment rate has moved down, it sort of gets distorted, again, by the labor force participation. And so I think that, actually, the growth rate has been fairly consistently around 100,000. And as you pointed out earlier, 100,000 is just keeping up with population growth. So we aren't actually making a dent as much as we'd like in the number of unemployed people that this country has.
INSKEEP: So what might affect the unemployment picture in the next few months?
NOGUCHI: Well, there are a few things, actually, where people are concerned about the labor market heading into, you know, more difficult times. President Obama is calling for an extension of the payroll tax cuts and emergency unemployment benefits. And that hasn't happened yet. So those things might expire at the end of the year. And the president and some economists believe that that could take a big bight out of economic growth. But the big question: Europe. If a country like Greece defaults, or if big banks in Europe stumble even more, than you're looking at huge setbacks for the U.S. that could prove more difficult, in some ways, than the financial crisis.
INSKEEP: OK. That's NPR's Yuki Noguchi here in our studios. Yuki, thanks very much.
NOGUCHI: Thanks, Steve. Transcript provided by NPR, Copyright NPR.
