Payrolls Probably Climbed in November as U.S. Economy Picked Up Into 2011

An increase in November payrolls probably pushed U.S. job gains past the 1 million mark for the year as the world’s largest economy strengthened heading into 2011, economists said before a report today.

Employment increased by 150,000 last month, according to the median forecast of 87 economists surveyed by Bloomberg News, bringing the rise so far this year to 1.02 million. The advances haven’t been large enough to bring down unemployment, which held at 9.6 percent, according to the survey median.

Another report may show service industries, which account for almost 90 percent of the economy, grew last month at the fastest pace since May as more jobs and rising wages boosted holiday sales at retailers like J.C. Penney Co. and Gap Inc. At the same time, the Federal Reserve is concerned joblessness will be slow to retreat, explaining why policy makers announced a new round of monetary stimulus.

“A lot of the hiring we expect to see is from the smaller, newer firms,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The outlook that we’re seeing in the near term is really not enough to push the unemployment rate down.”

The Labor Department’s report is scheduled for 8:30 a.m. Washington time. Estimates for payroll gains ranged from 75,000 to 200,000. Last month’s projected increase would be in line with the 151,000 workers employers added in October.

Employment Strengthening

Private payrolls, which exclude government agencies, rose by 158,000 last month after a 159,000 October gain, the survey showed. A similar increase in December would make the fourth quarter the strongest for employment this year, evidence the recovery is picking up. Such payrolls rose by 122,000 a month on average in the third quarter, by 118,000 in the second and by 79,000 in the first.

Economists’ projections for the jobless rate, which has been at 9.6 percent since August, varied from 9.4 percent to 9.7 percent. November would be the 16th month of joblessness at 9.5 percent or higher, the longest such stretch since records began in 1948.

Job losses in 2008 and 2009 totaled 8.4 million, pushing unemployment up from 5 percent in December 2007, as the worst recession since the 1930s took its toll.

Fed policy makers last month began buying Treasury securities as part of a plan to pump as much as $600 billion more into the financial system in a bid to keep interest rates low and spur growth. Chairman Ben S. Bernanke has been among those saying the recovery has been too slow, keeping unemployment too high and leading to a deceleration in inflation that raises the risk of deflation, or sustained and damaging price decreases.

Service Industries

A report from the Institute for Supply Management, scheduled for 10 a.m. New York time, is projected to show that the Tempe, Arizona-based group’s non-manufacturing index climbed to 54.8 from 54.3 in October. Readings higher than 50 signal expansion.

Improving job prospects are benefiting U.S. retailers. J.C. Penney, the third-largest U.S. department store chain, yesterday said so-called same-store sales climbed 9.2 percent in November, above a projection of 3.3 percent. Apparel retailer Gap posted a 5 percent gain. Overall, sales at more than 30 chains tracked by Retail Metrics Inc. rose 5.3 percent last month from the same time in 2009, the biggest year-over-year gain since March.

The spending outlook has helped boost retailer shares. The Standard & Poor’s Supercomposite Retailing Index, which includes Amazon.com Inc. and J.C. Penney, has climbed 9.2 percent since the end of October to reach a three-year high yesterday. The broader S&P 500 Index gained 3.2 percent in the same period.

In an effort to reach out to some of the nation’s largest employers, President Barack Obama met with Wal-Mart Stores Inc. Chief Executive Officer Mike Duke at the White House on Nov. 29. The meeting was one of a series of sessions aimed at soliciting the views of companies, with the goal of spurring the recovery and adding jobs.

                        Bloomberg Survey
==============================================================
                           Nonfarm  Private Unemploy  ISM Non-
                          Payrolls Payrolls     Rate     Manu
                            ,000’s   ,000’s        %    Index
==============================================================

Date of Release              12/03    12/03    12/03    12/03
Observation Period            Nov.     Nov.     Nov.     Nov.
--------------------------------------------------------------
Median                         150      158     9.6%     54.8
Average                        146      157     9.6%     54.6
High Forecast                  200      200     9.7%     59.4
Low Forecast                    75      115     9.4%     52.3
Number of Participants          87       48       83       76
Previous                       151      159     9.6%     54.3
--------------------------------------------------------------
4CAST Ltd.                     100     ---      9.5%     53.7
ABN Amro Inc.                  165      155     9.6%     54.8
Action Economics               145     ---      9.6%     54.5
Aletti Gestielle SGR           135      130     9.6%     54.5
Ameriprise Financial           172      180     9.5%     54.8
Banesto                        140     ---      ---      54.5
Bank of Tokyo- Mitsubishi      161      182     9.6%     52.3
Bantleon Bank AG               155     ---      9.6%     55.2
Barclays Capital               170      185     9.5%     54.5
Bayerische Landesbank          150     ---      9.6%     54.3
BBVA                           157      162     9.6%     54.5
BMO Capital Markets            140     ---      9.6%     54.8
BNP Paribas                    145     ---      9.7%     54.5
BofA Merrill Lynch Research    125      150     9.6%     55.0
Briefing.com                   150      175     9.7%     53.0
Capital Economics              130     ---      9.6%     55.0
CIBC World Markets             150     ---      9.6%     ---
Citi                           125      125     9.6%     53.0
ClearView Economics            145      160     9.7%     54.0
Commerzbank AG                 140      150     9.6%     55.0
Credit Agricole CIB            150     ---      9.6%     ---
Credit Suisse                  150      170     9.6%     55.0
Daiwa Securities America       130     ---      9.7%     55.0
Danske Bank                    120      130     9.6%     55.0
DekaBank                       160     ---      9.5%     ---
Desjardins Group               125     ---      9.7%     54.0
Deutsche Bank Securities       150      150     9.4%     55.0
Deutsche Postbank AG           130     ---      9.6%     55.2
DZ Bank                        180     ---      9.5%     55.0
Exane                          150     ---      9.6%     54.8
First Trust Advisors           168      188     9.6%     55.2
FTN Financial                  150      175     9.5%     55.0
Goldman, Sachs & Co.           125     ---      9.6%     55.0
Helaba                         100     ---      9.6%     53.5
High Frequency Economics        75      125     9.6%     55.0
Horizon Investments            135     ---      9.7%     55.0
HSBC Markets                   135      155     9.6%     54.5
Hugh Johnson Advisors          150     ---      9.6%     54.0
Ibersecurities                 188     ---      ---      ---
IDEAglobal                     155      165     9.5%     55.0
IHS Global Insight             150      160     9.6%     55.3
Informa Global Markets         185     ---      9.6%     54.2
ING Financial Markets          170      190     ---      54.9
Insight Economics              175     ---      9.7%     55.0
Intesa-SanPaulo                125     ---      9.6%     55.0
J.P. Morgan Chase              170      180     9.6%     55.5
Janney Montgomery Scott        143      155     9.5%     54.0
Jefferies & Co.                130      150     9.5%     55.0
Landesbank Berlin              130     ---      9.6%     54.0
Landesbank BW                  160      160     9.5%     54.5
Majestic Research              155      170     ---      ---
Maria Fiorini Ramirez          135      150     9.7%     54.7
MF Global                      190      200     9.5%     55.0
MFC Global Investment          135     ---      9.6%     54.3
Mizuho Securities             ---       125     9.6%     54.3
Moody’s Analytics              160      180     9.6%     59.4
Morgan Keegan & Co.            155     ---      9.5%     ---
Morgan Stanley & Co.           140     ---      9.6%     ---
National Bank Financial        120     ---      9.6%     55.0
Natixis                        120     ---      9.6%     54.0
Newedge                        130      138     ---      54.8
Nomura Securities Intl.        130     ---      9.5%     54.5
Nord/LB                        160      150     9.5%     54.5
Paragon Research               160     ---      9.6%     ---
Pierpont Securities LLC        160     ---      9.6%     54.6
PineBridge Investments         190     ---      9.4%     55.0
PNC Bank                       200     ---      9.5%     55.0
Prestige Economics             125      150     9.7%     54.0
Raiffeisen Zentralbank         120      130     9.6%     ---
Raymond James                  145      155     9.6%     55.0
RBC Capital Markets            110      127     9.6%     54.9
RBS Securities Inc.            145      150     9.6%     55.0
Saxo Bank                      150      160     9.6%     ---
Scotia Capital                 140     ---      9.6%     54.7
Societe Generale               195      195     9.5%     54.8
Standard Chartered             123      135     9.7%     54.0
State Street Global Markets    159      172     9.5%     55.1
Stone & McCarthy Research      105      115     9.6%     54.4
TD Securities                  150      160     9.6%     54.0
Thomson Reuters/IFR            150      160     9.6%     54.5
UBS                            150      175     9.6%     55.0
UniCredit Research             150     ---      9.7%     ---
Union Investment               185     ---      9.5%     ---
University of Maryland         105      117     9.7%     54.0
Wells Fargo & Co.              130      135     9.6%     55.1
WestLB AG                      140     ---      9.6%     54.0
Westpac Banking Co.            140     ---      9.5%     54.0
Wrightson ICAP                 170      185     9.5%     55.0
==============================================================

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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