U.S. November Payrolls Rise 112,000, Lagging Forecast
Dec. 3 (Bloomberg) -- U.S. employers added 112,000 workers in November, fewer than even the lowest forecast and a sign that increased costs for oil and raw materials made companies reluctant to hire.
The jobless rate dropped to 5.4 percent from 5.5 percent, the Labor Department said today in Washington. Job growth in the prior two months was revised down by 54,000. Factory jobs fell for a third month and retail employment declined.
Workers earned a penny more an hour than a month earlier, the smallest increase this year, at a time when they're paying more for fuel. Tepid wage growth underscores the difficulty retailers such as Wal-Mart Stores Inc. are having boosting holiday sales, and may restrain consumer spending and the economy in coming months.
``This throws cold water on the idea that the labor market has fully recovered,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. ``With the job market still lacking vigor, we're probably not going to see rapid growth in consumer spending.''
Treasury securities rose the most in four months, and the dollar declined as the report eased concerns the Federal Reserve would accelerate the pace of interest-rate increases. Central bankers meet Dec. 14 and are forecast to boost the benchmark overnight bank lending rate a quarter percentage point to 2.25 percent to keep a lid on inflation. It would be the fifth increase in as many meetings.
Fed's Santomero
The Fed should continue to raise interest rates ``at a measured pace'' next year as the economy expands at close to a 4 percent rate, creating ``solid but moderate gains in employment'' Philadelphia Federal Reserve President Anthony Santomero said today in a speech in Philadelphia.
Job growth has averaged 185,450 so far this year, the strongest since 264,330 in 1999. During the 1990s, payrolls increased an average of 180,350 a month, which would be equivalent to about 205,000 given the increase in the size of the labor force.
The Institute for Supply Management said today that its index of services and other non-manufacturing business unexpectedly rose to 61.3 in November from 59.8. Readings above 50 signal expansion.
``This is a pattern I think we should get comfortable with, which is a slow move ahead, a little choppiness month to month as companies continue to adjust themselves on the labor front,'' said Jeffrey Joerres, chief executive of Manpower Inc., the world's second-largest temporary staffing company, in a televised interview.
Energy Prices
``What we are seeing is a market that is much more measured and is clawing its way back up the hill in the labor market, not bounding,'' said Joerres.
A survey this week by the Business Roundtable, a Washington- based lobbying group, found that while 80 percent of CEOs expect hiring to increase or remain the same in the next six months, 20 percent said they expect hiring to decline. That compares with 12 percent who expected a drop three months ago. Among the CEOs surveyed, 19 percent cited energy prices as their biggest cost problem, up from 7 percent a year ago.
Crude oil prices, which have increased by a third this year, have declined 14 percent this week, the biggest weekly decline since the start of the U.S. invasion of Iraq. Crude oil for January delivery fell 71 cents to close at $42.54 a barrel on the New York Mercantile Exchange. Prices touched $42.05, the lowest since Aug. 31. Oil has declined 24 percent from a record of $55.67 on Oct. 25.
``As energy prices come down, there should be a reversal, and companies will hire more,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte.
October
Employment rose 303,000 in October, less than initially reported. Economists forecast payrolls to rise by 200,000 following the previously reported increase of 337,000 in October, according to the median of 75 estimates in a Bloomberg News survey. Efforts to rebuild in the wake of hurricanes in the Southeast helped boost October employment.
The Treasury's 4 1/4 percent note maturing in November 2014 rose 1 5/32, pushing the yield down 15 basis points to 4.26 percent at 4:19 p.m. in New York.
Against the euro, the dollar reached an all-time low, dropping to $1.3455 in New York from $1.3269 late yesterday, according to EBS, an electronic currency-trading system. The U.S. currency fell to 102.08 yen from 103.25.
Estimates for November employment ranged from an increase of 135,000 to 300,000. The jobless rate was forecast to fall to 5.4 percent. The rate is determined by a separate survey of households.
Holiday Sales
Oil prices and efforts to boost productivity may be limiting hiring. Gasoline prices at the pump are close to $2 a gallon, up from $1.53 a gallon a year ago, according to Energy Department data.
``You have to be disciplined in this economic climate,'' said Paul Finkelstein, chief executive at Regis Corp., the world's largest operator of hair salons, in an interview. ``We are adding employees all the time as we acquire and build stores, but we're not expanding staffs at our existing stores.''
U.S. retail sales rose less than forecast at the start of the holiday season as Federated Department Stores Inc. and Limited Brands unexpectedly posted November declines. Wal-Mart predicted an increase as small as 1 percent in December amid higher fuel prices and lower consumer confidence.
Sales at chain stores open at least a year rose 1.7 percent from a year earlier, the second-smallest gain in 20 months, according to the New York-based International Council of Shopping Centers. Almost half of 69 chains tracked by ICSC had declines.
Factories, Retailers
Manufacturers lost 5,000 jobs after a decline of 2,000 in October. Retail employment decreased 16,200 in November, the second decline in three months.
Construction jobs rose by 11,000 last month after rising by 65,000 in October.
Employment in service-producing industries, which include retailers, banks and government agencies, rose 104,000 last month after a 241,000 increase in October, today's report showed.
Workers' average hourly earnings rose 0.1 percent, or 1 cent, to $15.83 after 4-cent gain in October. Economists had expected a 0.3 percent increase in hourly wages. Average weekly earnings fell to $533.47 last month from $534.72.
The manufacturing workweek fell by six minutes to 40.5 hours and overtime held at 4.5 hours. Average weekly hours worked by production workers fell to 33.7 hours from 33.8 hours.
General Motors
General Motors Corp., the world's largest automaker, plans to lay off the remaining 950 production workers in February at a Linden, New Jersey, factory that builds two sport-utility vehicles being phased out.
In October, as many as 100,000 of the jobs added may have been related to hurricane cleanup efforts in the Southeast U.S., said Stephen Stanley, chief economist at RBS Greenwich Capital, in Greenwich, Connecticut. The nine states struck by hurricanes in the third quarter added 82,300 jobs in October, according to a government report on Nov. 19.
Monthly job gains of ``something between 100,000 and 150,000'' are needed to keep pace with the expansion of the labor force, Federal Reserve Bank of Richmond President Jeffrey Lacker said in an interview on Oct. 28.
U.S. chief executives still expect stronger growth and increased business spending, according to the Business Roundtable survey. Capital spending plans for the next six months were the strongest since the survey began in the fourth quarter of 2002.
The U.S. economy grew at a 3.9 percent annual pace from July through September, faster than the government first estimated, as consumer spending rose by the most in almost three years, a Commerce Department report showed this week.
Among blacks, the unemployment rate rose to 10.8 percent from 10.7 percent in October. The jobless rate for Hispanics held at 6.7 percent and for whites held at 4.7 percent.
Unemployment among teenagers fell to 16.6 percent last month from 17.2 percent. The jobless rate held at 4.8 percent for women and held at 4.9 percent for men.
Dec. 3 (Bloomberg) -- U.S. employers added 112,000 workers in November, fewer than even the lowest forecast and a sign that increased costs for oil and raw materials made companies reluctant to hire.
The jobless rate dropped to 5.4 percent from 5.5 percent, the Labor Department said today in Washington. Job growth in the prior two months was revised down by 54,000. Factory jobs fell for a third month and retail employment declined.
Workers earned a penny more an hour than a month earlier, the smallest increase this year, at a time when they're paying more for fuel. Tepid wage growth underscores the difficulty retailers such as Wal-Mart Stores Inc. are having boosting holiday sales, and may restrain consumer spending and the economy in coming months.
``This throws cold water on the idea that the labor market has fully recovered,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. ``With the job market still lacking vigor, we're probably not going to see rapid growth in consumer spending.''
Treasury securities rose the most in four months, and the dollar declined as the report eased concerns the Federal Reserve would accelerate the pace of interest-rate increases. Central bankers meet Dec. 14 and are forecast to boost the benchmark overnight bank lending rate a quarter percentage point to 2.25 percent to keep a lid on inflation. It would be the fifth increase in as many meetings.
Fed's Santomero
The Fed should continue to raise interest rates ``at a measured pace'' next year as the economy expands at close to a 4 percent rate, creating ``solid but moderate gains in employment'' Philadelphia Federal Reserve President Anthony Santomero said today in a speech in Philadelphia.
Job growth has averaged 185,450 so far this year, the strongest since 264,330 in 1999. During the 1990s, payrolls increased an average of 180,350 a month, which would be equivalent to about 205,000 given the increase in the size of the labor force.
The Institute for Supply Management said today that its index of services and other non-manufacturing business unexpectedly rose to 61.3 in November from 59.8. Readings above 50 signal expansion.
``This is a pattern I think we should get comfortable with, which is a slow move ahead, a little choppiness month to month as companies continue to adjust themselves on the labor front,'' said Jeffrey Joerres, chief executive of Manpower Inc., the world's second-largest temporary staffing company, in a televised interview.
Energy Prices
``What we are seeing is a market that is much more measured and is clawing its way back up the hill in the labor market, not bounding,'' said Joerres.
A survey this week by the Business Roundtable, a Washington- based lobbying group, found that while 80 percent of CEOs expect hiring to increase or remain the same in the next six months, 20 percent said they expect hiring to decline. That compares with 12 percent who expected a drop three months ago. Among the CEOs surveyed, 19 percent cited energy prices as their biggest cost problem, up from 7 percent a year ago.
Crude oil prices, which have increased by a third this year, have declined 14 percent this week, the biggest weekly decline since the start of the U.S. invasion of Iraq. Crude oil for January delivery fell 71 cents to close at $42.54 a barrel on the New York Mercantile Exchange. Prices touched $42.05, the lowest since Aug. 31. Oil has declined 24 percent from a record of $55.67 on Oct. 25.
``As energy prices come down, there should be a reversal, and companies will hire more,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte.
October
Employment rose 303,000 in October, less than initially reported. Economists forecast payrolls to rise by 200,000 following the previously reported increase of 337,000 in October, according to the median of 75 estimates in a Bloomberg News survey. Efforts to rebuild in the wake of hurricanes in the Southeast helped boost October employment.
The Treasury's 4 1/4 percent note maturing in November 2014 rose 1 5/32, pushing the yield down 15 basis points to 4.26 percent at 4:19 p.m. in New York.
Against the euro, the dollar reached an all-time low, dropping to $1.3455 in New York from $1.3269 late yesterday, according to EBS, an electronic currency-trading system. The U.S. currency fell to 102.08 yen from 103.25.
Estimates for November employment ranged from an increase of 135,000 to 300,000. The jobless rate was forecast to fall to 5.4 percent. The rate is determined by a separate survey of households.
Holiday Sales
Oil prices and efforts to boost productivity may be limiting hiring. Gasoline prices at the pump are close to $2 a gallon, up from $1.53 a gallon a year ago, according to Energy Department data.
``You have to be disciplined in this economic climate,'' said Paul Finkelstein, chief executive at Regis Corp., the world's largest operator of hair salons, in an interview. ``We are adding employees all the time as we acquire and build stores, but we're not expanding staffs at our existing stores.''
U.S. retail sales rose less than forecast at the start of the holiday season as Federated Department Stores Inc. and Limited Brands unexpectedly posted November declines. Wal-Mart predicted an increase as small as 1 percent in December amid higher fuel prices and lower consumer confidence.
Sales at chain stores open at least a year rose 1.7 percent from a year earlier, the second-smallest gain in 20 months, according to the New York-based International Council of Shopping Centers. Almost half of 69 chains tracked by ICSC had declines.
Factories, Retailers
Manufacturers lost 5,000 jobs after a decline of 2,000 in October. Retail employment decreased 16,200 in November, the second decline in three months.
Construction jobs rose by 11,000 last month after rising by 65,000 in October.
Employment in service-producing industries, which include retailers, banks and government agencies, rose 104,000 last month after a 241,000 increase in October, today's report showed.
Workers' average hourly earnings rose 0.1 percent, or 1 cent, to $15.83 after 4-cent gain in October. Economists had expected a 0.3 percent increase in hourly wages. Average weekly earnings fell to $533.47 last month from $534.72.
The manufacturing workweek fell by six minutes to 40.5 hours and overtime held at 4.5 hours. Average weekly hours worked by production workers fell to 33.7 hours from 33.8 hours.
General Motors
General Motors Corp., the world's largest automaker, plans to lay off the remaining 950 production workers in February at a Linden, New Jersey, factory that builds two sport-utility vehicles being phased out.
In October, as many as 100,000 of the jobs added may have been related to hurricane cleanup efforts in the Southeast U.S., said Stephen Stanley, chief economist at RBS Greenwich Capital, in Greenwich, Connecticut. The nine states struck by hurricanes in the third quarter added 82,300 jobs in October, according to a government report on Nov. 19.
Monthly job gains of ``something between 100,000 and 150,000'' are needed to keep pace with the expansion of the labor force, Federal Reserve Bank of Richmond President Jeffrey Lacker said in an interview on Oct. 28.
U.S. chief executives still expect stronger growth and increased business spending, according to the Business Roundtable survey. Capital spending plans for the next six months were the strongest since the survey began in the fourth quarter of 2002.
The U.S. economy grew at a 3.9 percent annual pace from July through September, faster than the government first estimated, as consumer spending rose by the most in almost three years, a Commerce Department report showed this week.
Among blacks, the unemployment rate rose to 10.8 percent from 10.7 percent in October. The jobless rate for Hispanics held at 6.7 percent and for whites held at 4.7 percent.
Unemployment among teenagers fell to 16.6 percent last month from 17.2 percent. The jobless rate held at 4.8 percent for women and held at 4.9 percent for men.
