) -- 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
. 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
rose 18 points, or 1.6%, to 1,118, as the
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%.
But several pieces of data released this week offered a mixed picture of the labor market.
on Wednesday estimated a greater-than-expected 169,000 jobs were slashed from private sector payrolls in November. Though the tally was an improvement from the prior month, several market observers note that the report has lost its luster after overestimating job losses in recent months.
But on Thursday,
initial claims -- or the number of first-time applications for unemployment benefits -- slid unexpectedly to their lowest level in over a year, landing at 457,000 last week, despite forecasts for a rise to 480,000. Ideally, initial claims will need to track below 450,000 for several consecutive weeks before sentiment turns more optimistic about job creation.
Some of the nation's largest companies continued to announce layoffs during the month, with headlines from the likes of
--Written by Sung Moss in New York