Posted 8:48 AM by steve

I'm not sure how to reconcile that more jobs were lost than forecast (533,000 jobs lost versus a forecast of 320,000) with the unemployment rate being lower than forecast (6.5% versus the forecast of 6.7%)...

Since the unemployment rate is driven by the number of people who don't have jobs, shouldn't more people losing their jobs result in a higher unemployment rate?

Well, since the unemployment rate measures the number of people who are looking for full-time work, if enough people losing their jobs took themselves out of the job market (by retiring, shifting from full-time to part-time work, or just plain giving up on finding a job), the upwards bump in the unemployment rate would be lower than it otherwise would be.

Another explanation is that neither of those two statistics measure hiring. If someone who is laid off finds a replacement job, there is no change in the unemployment rate. While it is unlikely that large number of those losing their jobs in November were able to find replacement jobs by the end of the month, some number of those who had previously lost their jobs were able to find work in November; not everybody who was unemployed at the end of October remained unemployed at the end of November.

So which of the two is more likely? Did large number of people, upon losing their jobs, take themselves out of the full-time job market? Or did a fair number of the unemployed find jobs in November?