There is some potentially good news on the U.S. unemployment front as the headline rate of unemployment fell from 9.0 % last October to 8.6% for the past November. Part of this fall in unemployment is due to the positive news on the job creation front where the jobs report shows an additional 120,000 jobs were created and the previous months preliminary job estimates were upgraded substantially  in subsequent revisions.The unemployment percentages also dropped because of private sector job creation while the public sector regrettably continues to shed jobs, some 20,000 last month alone. But part of the reason for the fall in unemployment is also because a large number of people gave up looking for work and left the labour force altogether. Nevertheless, if the trend in job creation continues in the coming months we can expect unemployment to fall perhaps by as much as a full percentage point in the coming months. The broader measure of unemployment U6 which includes discouraged workers, part time workers who would rather be working full time and other marginally attached members of the labour force also fell to 15.6 %. One other important statistic is the ratio of employment people 16 years or older to the popuklation. This remains depressed at 58.5% down from the 63 % levels that prevailed prior to 2008.

In Canada the rate of unemployment rose by one tenth of a percentage point to 7.4 % with unemployment higher in Quebec at 8 % and slightly lower in Ontario at 7.9 %.

In the U.S. if we adjust the data for the additional people who left the labour force and assume that they were all discouraged workers as opposes to those retiring  and add them back in as unemployed the rate of unemployment becomes 8.8 %. Not as impressive as 8.6 % but significant improvement in the right direction, nevertheless. There is a possibility that if things go well in the coming months and the European situation is stabilized that unemployment next fall might well be significantly below 8 %. But this is much more likely to happen if on neither side of the Atlantic interest rates rise nor draconian austerity is imposed.