Unemployment rises to 9.8%, economy faltering

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Unemployment stubbornly rises to 9.8 percent in November 2010. Here, workers line up outside an unemployment office in Jersey City

Despite regular reassurances from Washington that things are getting better, the nation’s workers aren’t seeing it the same way. According to the U.S. Bureau of Labor Statistics, unemployment rose to 9.8% in November, up from 9.6% in the previous three months.

Economists had estimated that 150,000 jobs would be added last month, but the tepid economy managed a 39,000 job increase. More than 15 million people were unemployed last month, and over 40% of those have been jobless for over six months.

Private companies added about 50,000 employees last month, mostly as temporary help and healthcare workers. The retail, manufacturing and construction sectors all experienced job losses.

The unemployment rate has now been above 9% since May 2009, the longest stretch above that mark since the Second World War.

Most economists were taken by surprise by the report. In order to keep the unemployment rate constant, the economy must add about 100,000 jobs each month, just to keep up with  new entrants to the labor market.

The Social Security Administration estimates that the economy needs to add 200,000 jobs per month just to get the unemployment rate below 8 percent by 2012. The slowdown now suggests that persistent high rates of employment may be the norm for years to come.

More job losses are expected in the public sector, since government agencies were slow to trim payrolls during and after the recession. With mounting deficits at every level of government, a huge wave of layoffs of government workers may be just around the corner, as voters are focusing on the rising deficit as one of their top issues for the 2012 election.

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