US unemployment dips to 9.0% but gloom remains
US unemployment edged down to 9.0 percent last month, as official figures confirmed Friday that the economic recovery is only strong enough to nibble away at brutal levels of joblessness. The Labor Department said the economy managed to break away from three months of 9.1 percent unemployment in October, but that jobs are being generated at a pace that offers little succor to the 14 million Americans looking for work. The economy created 80,000 jobs in October, slightly worse than economists expected, although there were heavy upward revisions for previous months. "While this report is not good enough, several key numbers are now moving in the right direction," said Ian Shepherdson, chief US economist with High Frequency Economics. "The odds of significantly better employment reports over the next few months seem to be improving." That offered only limited consolation to President Barack Obama, who is racing to improve the jobs picture before elections in November 2012. Speaking at the G20 summit in Cannes, France, Obama said the jobs figures were "positive" but indicated "once again that the economy is growing way too slow." Over the past 12 months, an average of 125,000 nonfarm jobs were created each month, the Labor Department reported, much fewer than needed to substantially bring down the unemployment rate. "To actually improve the unemployment rate, we need to be significantly above where we are today on job creation," said Matt McDonald of Hamilton Place Strategies. "To get below eight percent unemployment by election day, the economy needs to create 263,000 jobs per month," he said, referring to the US presidential election on November 6, 2012. The jobs report, while moving in the right direction, is likely to confirm suspicions that the US economy is only just avoiding stall speed. "The latest jobs report shows another month of unacceptably high unemployment," said Reince Priebus, the chairman of the Republican National Committee, as he urged Obama to work with his party. The report will also heighten concerns that unemployment resulting from a severe recession that ended more than two years ago is becoming more baked into the economy. Over 40 percent of those out of work have been looking for work for more than 27 weeks -- or nearly seven months. The gloom is compounded by concerns that Republicans in Congress will refuse to spend more to stimulate the economy and the Federal Reserve is running short on policy options. Obama again urged Congress to act. "There's no excuse for inaction," he said. "My hope is that the folks back home including those in the United States Senate and the House of Representatives when they look at today's job numbers... that they think twice before they vote 'no' again." And with the potential for spillover from Europe's ever-deepening debt crisis, pessimism reigns. "At this rate, the labor market will never start putting the backlog of nearly 14 million unemployed workers back to work," said Heidi Shierholz, an economist at the left-leaning Economic Policy Institute. "In other words, given the enormous scope of the unemployment problem, this minimal level of job creation will keep us mired in disastrously high unemployment." But details of the Labor Department report offered some hope that future jobs figures could at least exceed painfully low expectations. There was modest job growth in professional and businesses services, leisure and hospitality, health care and mining. The Labor Department upwardly revised jobs creation figures for August, to 104,000 from the prior estimate of 57,000, and for September, to 158,000 from 103,000. "The upward revisions were broad-based and included both private and public sector jobs and key industries such as manufacturing," said economists at Japanese bank Nomura. "This report indicates that labor market conditions have been somewhat stronger than previously thought." But the report was not strong enough to prop up the stock market. The Dow Jones Industrial Average closed the day down 61 points, around half a percentage point, to end at 11,983 points.