A surprise drop in the jobless rate and a new measurement showing a sharp slide in consumer sentiment underscore what's at stake for a sluggish economic recovery threatened by the coming political showdown in the nation's capital.
Employers added a better-than-expected 146,000 jobs in November and the unemployment rate tumbled two-tenths of a percentage point to 7.7 percent, the Labor Department said Friday in a report that suggested the economy is gaining a bit more economic steam.
But weighing against the positive numbers, the University of Michigan released its monthly measurement of consumer confidence Friday and found that it had plunged by more than 8 points. It's a clear indicator that Washington's squabbling over possible tax increases and steep government spending cuts in 2013 is affecting consumers and can serve either to kick-start or hurt growth.
"Bottom line is that the job market is holding firm despite rising worries over the fiscal cliff. If Washington can get it together reasonably soon, the job market will kick into a higher gear," said Mark Zandi, the chief economist for forecaster Moody's Analytics.
In an investor note, Bank of America Merrill Lynch economist Michelle Meyer added that "businesses have cut back investment in capital in the face of the cliff, they have yet to do so with labor. This shows some stability heading into year-end."
Still, bitter partisan political battles are worrying ordinary Americans and may affect their behavior. On Friday, financial and insurance giant Allstate released its latest Heartland survey, which also found flagging sentiment.
Asked whether the country is moving in the right direction, 75 percent of Democrats surveyed said the economy would improve in the next 12 months, while 63 percent of Republicans queried said it would get worse.
"That's what we've seen consistently in our polls: a pretty even split, deeply divided," said Joan Walker, an Allstate executive vice president.
The measures of sentiment help explain why the political parties remain so dug in to their positions as the "fiscal cliff" approaches.
Missing from Friday's jobs report, it seemed, were the effects of Superstorm Sandy, which devastated the East Coast as it made landfall Oct. 29. The Bureau of Labor Statistics, part of the U.S. Labor Department, felt compelled to say as much when it released the monthly report.
"Our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November," the BLS said, noting that response rates to its survey from businesses were within normal ranges. Statisticians revised down the previous employment estimates for September and October by a combined 49,000 jobs. Friday's report included an unusually large revision to October's government hiring numbers. The agency said there were 51,000 fewer government jobs than first reported for October.
Revisions have become political issues, in part because former General Electric chief Jack Welch made unfounded allegations last month that the BLS was manipulating data to favor President Barack Obama's re-election.
Friday's revision to October government hiring estimates is due to incomplete data sent by local school systems nationwide that month, said Kara Sullivan, the BLS economist who compiles jobs data on the government and health care.
Most Popular Stories
- SEO Traffic Lab Celebrate Wins at Digital Marketing Event 'Internet World 2013' in London
- Social Media Initiatives Should Follow Customers' Lead
- Apple CEO: Offshore Units Not a 'Tax Gimmick'
- U.S. Senate Accuses Apple of Large-scale Tax Avoidance
- UTEP Water Recycling Project Wins Venture Titles
- Marketo Makes a Mint in IPO: Stock Shoots Up More than 50 Percent
- Bieber Booed at Billboard Awards
- Crude Oil Up, Gasoline Down
- Austin Startup Compare Metrics Raises $3.5 Million for Expansion
- Why So Many Top 'Car Guys' Are Actually Women