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Faint praise

Money | Recent unemployment news is good, but it may not be good enough

Issue: "2011 Daniel of the Year," Dec. 17, 2011

Unemployment rates fell in 36 states in October and rose in only five, the Labor Department said Nov. 22. That's the best report since April. The report also said employers added 80,000 new jobs in October and revisions of the previous two months show stronger gains as well.

That's the good news. The rest of the news is that the United States needs to generate at least 125,000 jobs a month just to keep up with population growth.

The news is not the same everywhere. The Great Recession hit some states hard, while other states mostly avoided it. Nevada had the nation's highest unemployment rate for the 17th straight month, unchanged at 13.4 percent. California was second-highest at 11.7 percent. North Dakota was at the other end of the spectrum, with unemployment of just 3.5 percent.

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So what does the future look like? The current unemployment rate is 9.0 percent. Richard DeKayser, an economist with the Parthenon Group, said the jobs picture "should improve, but not much." Conventional wisdom is that the unemployment rate will keep falling slowly over the next year, landing somewhere in the mid-eights by the 2012 elections.

But improvements will be unsteady. The Conference Board's index of leading economic indicators surged 0.9 percent in October. It was the index's best showing since February. But the same week that report came out, Gross Domestic Product growth for the third quarter was revised downward to 2 percent.

Nonetheless, John Silvia, the chief economist with Wells Fargo, said the number didn't mean a true economic slowdown. He said the downward revision was the result of a "drawdown of inventories" and that manufacturing would ramp back up when inventories were depleted by the Christmas buying season. He still believes the U.S. economy will avoid another recession any time soon.

Early rising

Michael Nagle/Getty Images

Black Friday got its name because it was the day when retailers' annual financial statements went from the red ink of losses to the black ink of profits. This year's Black Friday sales were so strong that the only item that might see a sales slump will be red printer cartridges.

Earlier store openings drew complaints from retail employees. One Target employee created an on-line petition protesting the early openings. More than 190,000 people signed it. But the early openings and steep discounts resulted in record sales on Black Friday weekend. Total spending over the weekend following Thanksgiving reached a record $52.4 billion, up 16 percent from $45 billion last year, according to a survey by the National Retail Federation.

Individual shoppers spent more too, the NRF said. The average holiday shopper spent $398.62, up from $365.34 in 2010.

Warren Cole Smith
Warren Cole Smith

Warren, who lives in Charlotte, N.C., is vice president of WORLD News Group and the host of the radio program Listening In. Follow Warren on Twitter @WarrenColeSmith.

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