The U.S. economy has been bolstered by the addition of 146,000 jobs last month yet a drop in the unemployment rate is "misleading" because it reflects more people leaving the work force, according to one expert.
"For every job being created, about two people left the labor force," said Michael Goodman, a University of Massachusetts Dartmouth public policy professor. "That does not mean positive job growth isn't good for those 146,000 people and their families. It's extremely good news and a step in the right direction for them and the country."
The unemployment rate dropped two-tenths of a percentage point to 7.7 percent, the lowest since December 2008. The U.S. government added Hurricane Sandy had only a small effect on the national figures even though the construction sector lost 20,000 jobs.
However, employers added 49,000 fewer jobs in October and September than initially estimated. People who have stopped looking for work are not counted as unemployed.
"We've got a recovery that's underway but we have a profound long-term unemployment problem that's making it very difficult for workers across the country," Goodman said. "Those two things can happen at the same time and they are happening at the same time."
Goodman added that the looming "fiscal cliff" deadline would cause employers to hold off hiring new workers until there's more certainty about tax increases, as opposed to simply laying people off.
Reconstruction efforts in the wake of Hurricane Sandy — particularly in New York and New Jersey — would also "put some wind in the sails in the national construction industry," Goodman said.
"Over time I think reconstruction efforts should be expected to create opportunities for firms and for workers who are going to put New York and New Jersey back together again," he said.
Herald wire services contributed to this report.
