Non-farm payrolls rose by a disappointing 39,000 jobs in November as the unemployment rate edged up to 9.8 percent, the government said Friday.
November hiring rose by much less than the 150,000 jobs economists were expecting. The unemployment rate was forecast to hold steady from October's 9.6 percent, but instead it increased to 9.8 percent.
The report is more bad news about hiring at a time when big business is awash in gravy.
In the third quarter, U.S. business earned profits at a rate of $1.659 trillion a year—the highest in history, unadjusted for inflation. That's a sea change from the start of the great recession in 2008, when the bottom fell out of corporate profits and workers were pushed out the door at a record pace.
Walker Lewis, chairman and founder of Devon Value Advisors, which tells companies how to maximize their market value, says his own analysis of profits (pre-tax operating return on operating capital) shows they have doubled from 15 percent to 30 percent over the last quarter century. "It's a chart with a steady progression," he says, and the direction is up.
As for money-in-the-bank, the S&P 500's non-financial companies are presently sitting on $1 trillion in cash or cash-equivalents. The last person who saved like that for a rainy day was Noah.
But much to the chargrin of the unemployed and government policymakers, companies aren't lavishing their largess on labor.
Somewhere between 15 and 27 million people, depending on how you figure it, remain unemployed.
"Shameful," DeAnn McEwen, a member of the Council of Presidents of the California Nurses Association, calls the situation. Her members, after layoffs, are suffering: "There's just that much more work for those left behind."
Employers don't need to hire. They are aren't getting more work out of fewer people, thanks to what Daniel Pedrotty, director of the AFL-CIO's Office of Investment, calls a climate of fear: "There are five applicants for every opening. You have to work harder or your job either will be done away with or outsourced. Companies would just as soon open a factory in India as in Peoria."
Despite what he calls corporate "whining" about Washington's having an anti-business attitude, "There's never been a better time for the private sector. The Fed is keeping interest rates at record lows. Washington is telling federal employees to take a pay freeze, while doing nothing about Wall Street pay."
While CEOs award themselves "outrageous bonuses," says Pedrotty, the little man is hurting.
"Half the people out of work have been unemployed for over six months. They're burned out. They're got the makings of a permanent under-class. We all know where that leads. Our country is at a point where things are really going to get bad. But you'd never know it, to visit a corporate board room. They're sitting on cash--holding our economy hostage."
Lewis sees things differently.
"It's no big mystery," says he, why business isn't hiring: For 20 years management has been investing in technology to improve productivity. And for the last ten years, CEOs have been frustrated not to be able to shed people.