The unemployment rate fell to 7.7 percent in November, its lowest level since December of 2008. However, the immediate cause was a drop of 350,000 in the size of the labor market as reported employment actually fell by 122,000, according to the Bureau of Labor Statistics' latest employment report. The establishment survey reported job growth of 146,000, but with growth in the prior two months revised downward by 49,000, this brings the average over the last three months to 139,000. This means the economy is creating jobs at a rate that is a bit faster than what is needed to keep pace with the growth of the labor market.

Retail was the biggest job gainer in November, adding 53,000 jobs in November, 33,000 of which were in clothing. After showing little change for the prior three years, the retail sector has added 140,000 jobs over the last three months, with clothing being responsible for almost half (68,000) of these jobs. Some of these gains are almost certainly the result of changing seasonal patterns with retailers pulling forward holiday hiring. That suggests weaker growth going forward. The November jobs report show pretty much the same picture as what we have been seeing over the last six months: At the current pace, we would not see the economy returning to full employment for another decade, perhaps longer if there were to be severe deficit reduction as a result of the current negotiations between President Obama and Congress.

For a more in-depth analysis, check out the latest Jobs Byte.