Hiring Probably Failed to Cut Joblessness: U.S. Economy Preview
Jobless Claims in U.S.
Tim Boyle/Bloomberg
The total number of people on unemployment benefit rolls decreased to a six-month low.
The total number of people on unemployment benefit rolls decreased to a six-month low. Photographer: Tim Boyle/Bloomberg
Nov. 25 (Bloomberg) -- Neal Soss, chief economist at Credit Suisse, talks about the outlook for the U.S. economy. Soss, speaking with Sara Eisen on Bloomberg Television's "InsideTrack," also discusses the possible impact of the European bank crisis on the U.S. (Source: Bloomberg)
The pace of hiring in November probably failed to reduce unemployment in the U.S., showing employers remain concerned growth will slow, economists said before reports this week.
Payrolls climbed by 120,000 workers after rising 80,000 in October, according to the median forecast of 59 economists in a Bloomberg News survey before a Dec. 2 report from the Labor Department. The jobless rate probably held at 9 percent.
DirecTV (DTV) is among companies saying they will keep a tight rein on spending and employment in 2012 on concern Europe’s debt crisis and election in the U.S. will restrain the world’s largest economy. The lack of jobs will probably pressure wages, depriving consumers of the means to boost spending, which accounts for about 70 percent of the economy.
“We have a labor market that’s improving, but it’s still not great,” said Stephen Stanley, chief economist for Pierpont Securities LLC in Stamford, Connecticut. “Uncertainty over Europe and the U.S. fiscal situation is an impediment to firms expanding, whether it is labor or capital investment.”
Other reports this week may show manufacturing picked up, new-home sales stagnated and property prices declined.
The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.
The projected gain in payrolls would bring the average for July through November to 118,000, compared with 131,000 in the first six months of the year.
Shares Slump
Concern is growing that a European country will be forced to default. The Standard & Poor’s 500 Index fell 0.3 percent to close at 1,158.67 at 1 p.m. close in New York on Nov. 25, falling for a seventh straight day, the longest streak since August.
The payrolls report may also show private employment, which excludes government jobs, climbed 145,000 after an October gain of 104,000, economists forecast.
The crisis in Europe and presidential election in the U.S. make it difficult to predict the level of economic expansion, causing DirecTV to “slow our growth rate,” Michael White, chief executive officer of the largest U.S. satellite-TV provider said in an interview last week.
“We’re tightening our belts in terms of spending,” White said in the Nov. 21 interview. “We’ll cut back on overhead, hiring and programming.”
Holiday Hiring
At the same time, companies like Macy’s Inc. (M) are among those adding workers for the holiday season. The second-biggest U.S. department-store chain increased the hiring of mostly part- time employees by 4 percent for the November-December shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., said it would add 5,500 mostly temporary workers to help meet increased holiday production.
The scant number of jobs may explain why Americans’ moods are even more terrible now than during the economic slump. The Conference Board’s index of consumer confidence rose to 44 this month, according to the Bloomberg survey median ahead of a Nov. 29 report. The gauge averaged 53.7 during the 18-month recession that ended in June 2009.
Federal Reserve Chairman Ben S. Bernanke and his colleagues this month cut economic growth forecasts for 2012 and said unemployment will average 8.5 percent to 8.7 percent in the final three months of next year, up from a prior range of 7.8 percent to 8.2 percent.
Manufacturing Pickup
Manufacturing is one area of the economy that continues to grow. The Institute for Supply Management’s factory index of climbed to 51.5 in November, economists surveyed by Bloomberg projected ahead of a Dec. 1 report. Readings above 50 indicate expansion.
Housing remains a laggard as distressed properties depress prices and keep buyers on the sidelines. The Commerce Department may report tomorrow that new houses sold at a 313,000 annual rate in October, the same as in the prior month, the Bloomberg survey showed. That would put the monthly average for the year at 304,000, less than the 323,000 in 2010 that was the lowest since data-keeping began in 1963.
Property values in 20 cities fell 3 percent in September from a year earlier, economists predicted ahead of a Nov. 29 report from S&P/Case-Shiller.
Bloomberg Survey
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Release Period Prior Median
Indicator Date Value Forecast
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New Home Sales ,000’s 11/28 Oct. 313 313
New Home Sales MOM% 11/28 Oct. 5.7% 0.0%
Case Shiller Monthly MO 11/29 Sept. -0.1% 0.0%
Case Shiller Monthly YO 11/29 Sept. -3.8% -3.0%
Case Shiller Monthly In 11/29 Sept. 142.8 n/a
Case Shiller Quarterly 11/29 3Q -5.9% -3.3%
Case Shiller Quarterly 11/29 3Q 130.1 130.8
Consumer Conf Index 11/29 Nov. 39.8 44.0
ADP Payroll ,000’s 11/30 Nov. 110 130
Productivity QOQ% 11/30 4Q P 3.1% 2.6%
Labor Costs QOQ% 11/30 4Q P -2.4% -2.1%
Chicago PM Index 11/30 Nov. 58.4 58.5
Pending Homes MOM% 11/30 Oct. -4.6% 1.5%
Construct Spending MOM% 12/1 Oct. 0.2% 0.3%
Initial Claims ,000’s 12/1 26-Nov 393 390
Cont. Claims ,000’s 12/1 18-Nov 3691 3650
ISM Manu Index 12/1 Nov. 50.8 51.5
ISM Prices Index 12/1 Nov. 41.0 45.0
Nonfarm Payrolls ,000’s 12/2 Nov. 80 120
Private Payrolls ,000’s 12/2 Nov. 104 145
Manu Payrolls ,000’s 12/2 Nov. 5 9
Unemploy Rate % 12/2 Nov. 9.0% 9.0%
Hourly Earnings MOM% 12/2 Nov. 0.2% 0.2%
Hourly Earnings YOY% 12/2 Nov. 1.8% 2.0%
Avg Weekly Hours 12/2 Nov. 34.3 34.3
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To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net
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