WASHINGTON ( TheStreet) -- In an upside surprise, the nation's economy lost far fewer jobs than expected in November, fueling the belief that the labor market is officially on the mend.
The Labor Department reported that 11,000 jobs were slashed from nonfarm payrolls last month, besting consensus estimates calling for a decline of 125,000 jobs, according to economists polled by Thomson Reuters. The easing drop in November marks the fewest losses since December 2007.
The nation's jobless rate also edged down to 10% from a 26-year high at 10.2% last month.
But individual estimates had varied widely before the release of the report, with some predictions approaching declines of 200,000 and others forecasting a near flat result. Taken together, the figures offered a welcome surprise to many market observers who had been looking forward to the report all week."This is good news," said Peter Cardillo, chief market economist at Avalon Partners, who had forecast a loss of 95,000 jobs and the jobless rate declining to 10.1%. "This is a step in the right direction and confirms that we've probably peaked in unemployment." "Traditionally, unemployment lags," added Cardillo. "But it looks as though the economy will stop shedding jobs and we can start seeing some job growth in the first quarter of 2010." Though the strong result also comes coupled with the realization that the number of unemployed continues to remain high, investors were feeling buoyant after the release, as the Dow Jones Industrial Average added 137 points, or 1.3%, to 10,503. The S&P 500 rose 18 points, or 1.6%, to 1,118, as the Nasdaq gained 40 points, or 1.8%, to 2,213. Even more telling, the government report reflected sharp revisions in job loss estimates from recent months. October losses, which were originally estimated at 190,000, were edited down to 111,000. September losses fell to 139,000 after a downward revision from 219,000. Temporary help services and health care segments added jobs, though that was offset by losses in construction, manufacturing and information. The average workweek figure also rose by 0.2 to 33.2 hours, while average hourly earnings edged higher by 0.1%.
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