A Washington Post article discusses the renewed strength of retail spending and housing data, citing the $1 billion of online sales during Cyber Monday. However the latest Bureau of Labor Statistics provides a conflicting picture.
After resting at 9.6% for the previous three months, the unemployment rate rose in November to 9.8%, according to the BLS employment situation report released this morning. The increase reflected an increase in the number of unemployed, a decrease in the number of employed and an increase in the total civilian labor force. The underutilized workforce remained at 17% for the month.
Non-farm jobs increased by 39,000, about a tenth of what would be expected during a normal robust recovery. The good-producing sector fell by 15,000 jobs and private service-producing jobs increased by 65,000, with strongest gains in professional services (53,000) and education (30,000) retail and finance jobs fell by 28,000 and 9,000, respectively. Government jobs fell by 11,000, with local government falling the most (14,000).
Small businesses are bracing for tax increases next month, becoming reluctant to hire in the face of a modest rebound. Increases in capital gains taxes will likely affect stocks and make it harder for all businesses to find market capital. This means that expansion will come slowly and hiring will be postponed.