U.S. adds 146,000 jobs, unemployment rate drops to 7.7 percent

U.S. employers added 146,000 jobs in November and the nation's unemployment rate hit a four-year low of 7.7 percent, the Labor Department reported Friday.

The jobs gains were double what some economists had expected, and the decline in unemployment from 7.9 percent in October was certainly welcome.

But the news comes with a caveat.

The drop in unemployment occurred primarily because more people gave up looking for work and weren't counted as unemployed. Moreover, employers added 49,000 fewer jobs in the September/October period than the government had initially estimated.

Still, things are headed in the right direction, according to Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp.

"We are indeed making progress," Kleinhenz said. "We've had three successive months where the unemployment rate has been below 8 percent. That's encouraging news."

Hurricane Sandy has not had a significant impact on the national economy, according to the jobs report. But Kleinhenz warned that the looming fiscal cliff could wreak havoc on California's economy.

Expiration of a 2 percent payroll tax cut after the first of the year would reduce consumers' take-home pay and curb consumer spending, he said, and defense and non-defense sequestration cuts would result in 225,464 jobs lost.

Kleinhenz said the fiscal cliff also could reduce California's gross state product - the annual measure of

goods and services produced - by $22.7 billion. And local defense contractor cuts could result in $2 billion in revenue losses.

Going over the cliff, he said, could reverse any economic growth in Los Angeles County since the recession.

Another group that would feel the pinch at the start of 2013 is the unemployed.

About 400,000 jobless Californians who have been receiving unemployment benefit extensions will stop receiving checks at the end of the year unless Washington acts, according to Loree Levy, a spokeswoman for the state Employment Development Department. The federal government has paid $40 billion in federal extension benefits in California since July 2008, she said.

The nonpartisan Legislative Analyst's Office also has warned that the state could lose as much as $11 billion in tax revenue if the nation fell back into recession. That would wipe out the bulk of tax gains under Proposition 30, a set of temporary sales and income taxes hikes voters approved last month.

The nation's retail sector posted the biggest gains last month with 53,000 new jobs. That industry has boosted its payrolls over the past three months by 140,000 jobs.

Aeropostale, a casual clothing and accessories store in the Westfield West Covina mall, began bringing on seasonal hires in October, according to store manager Amber Fierro.

"We've done plenty of hiring," she said. "So far we've hired about 15 more people. It's been very busy. Now we have about 30 employees."

Baris Zakarian, sales manager for Miller Honda in Van Nuys, said his dealership has been jumping, too.

"I've been here since Aug. 1 and I've never worked less than a 12-hour shift ... and even that doesn't seem to be enough," he said.

Those retailers are hopping, but Southern California could be in for some heavy job losses elsewhere if the El Segundo-based Fresh & Easy grocery chain opts to pull out of the region.

British retail giant Tesco, Fresh & Easy's parent company, announced this week that it's conducting a "strategic review" of its Fresh & Easy stores, which could result in a sale of the unit.

With 200 stores in California, Nevada and Arizona, the chain employs about 5,000 workers. Fresh & Easy operates locations in several Southland communities, including Granada Hills, Santa Clarita, Long Beach, Pasadena and Ontario, among others.

Other nationwide job gains for November came in professional and business services, leisure and hospitality, health care, the information sector and wholesale trade.

The biggest losses occurred in construction, with a decline of 20,000 jobs in November, and manufacturing, which lost 8,000 jobs.

The number of long-term unemployed - those jobless for 27 weeks or more - was little changed at 4.8 million in November. These people accounted for 40.1 percent of the unemployed.

Jobless rates have remained far higher in Southern California.

Los Angeles County's unemployment rate dipped to 10.5 percent in October, down from a revised 10.6 percent the previous month and 12.2 percent a year earlier, the state Employment Development Department reported recently. The county added 41,200 jobs over the month and 57,800 jobs on an annual basis.

The Inland Empire's unemployment rate ticked up to 11.7 percent in October compared with 11.6 percent the previous month and 13.2 percent a year ago.

The two-county region added 8,800 jobs over the month and was up 7,300 jobs from October 2011, the EDD reported.

New employment figures for those regions and California are scheduled to be released Dec. 21.

Inland Empire economist John Husing said his two-county area is experiencing slow but consistent growth.

"What you're looking at here is an economy that is healing," he said. "And I think it would be healing faster except for the fiscal cliff."

Husing said the Inland Empire had 1,287,300 jobs at the peak of the economy. If current employment trends continue the region will have 1,163,100 jobs by year's end - still 124,200 jobs below the peak, he said.

"I think companies are holding back on hiring because they don't know what next year looks like," Husing said. "This is a case of politics affecting the economy."

The Associated Press contributed to this report.

kevin.smith@sgvn.com

626-544-0810

Source: http://www.redlandsdailyfacts.com/ci_22149199/u-s-adds-146-000-jobs-unemployment-rate?source=rss_viewed

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