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Friday, December 07, 2012

Unemployment rate falls to 7.7 percent; Labor Department says Sandy had little affect on report

Best thing about this unemployment report? It comes with a heck of a lot less political strings attached, because that darn 2012 election cycle is behind us. Now, onto the news ...

The economy created another 146,000 jobs last month and the unemployment rate fell to 7.7 percent, though I'm not sure just how to read this, in terms of what this means going forward. While it came in much better than the economic consensus, I'll still say we have to wait awhile before we know what the jobs market is really doing, given all of the complicating data points and threats.

Just about everyone was expecting that Superstorm Sandy would affect the report, like it had for so many other data points the past few weeks. But the Labor Department says it did not have much of an impact. Update: Economists are saying that claim by the Labor Department should be taken with a grain of salt, because even if Sandy reduced the number of jobs by 90,000, the department would not consider that significant because it factors in the entire economy, which is massive, while the rest of us focus on the top line number.

Here is the take by bloggers at the Wall Street Journal.

Here's the write-up from Marketwatch

This is the report from the Labor Department

And the jobs numbers for September and October were revised downward from previous estimates, which makes the top line number seem a little softer than it otherwise would look. And participation in the labor force seems to have dropped a bit as well.

Still, it's hard to argue that an economy that saw the jobless rate top out at 10 percent in 201o and is now down to 7.7 percent is something that we shouldn't be encouraged by. It remains higher than any of us would like, but there are plenty of indications that the economy is finding its footing.

Big threats still loom large, though, including whatever is going on in the euro zone, the heating up of some hot spots in the Middle East in terms of possible military conflicts that might drag the U.S. deeper into them, and, of course, a potential disaster of our own making called the fiscal cliff.

Bottom line: We are continuing to see improvement in the economy but it is far too early to unfurl the mission accomplished banner.

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