Sandy Probably Dealt Blow to U.S. Job Market in November
Employment probably slowed in November as the damage wreaked by superstorm Sandy set the U.S. labor market back, economists said before a report today.
Payrolls rose by 85,000 workers, the fewest since June, following a 171,000 increase in October, according to the median forecast of 90 economists surveyed by Bloomberg. The jobless rate may have held at 7.9 percent, the survey showed.
“Sandy was a temporary drag that reduced employment,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut. “Outside of that, we’ve seen a low level of hiring.”
Some employers may be reluctant to take on more staff until lawmakers come to agreement on how to avoid the more than $600 billion in tax increases and government spending cuts slated to take effect next year. For their part, Federal Reserve policy makers are focusing on the elevated unemployment rate as they consider whether to increase record stimulus.
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg payroll survey estimates ranged from increases of 15,000 to 145,000.
Gains in employment, rising home values and cheaper gasoline are helping boost Americans’ moods, other data may show at 9:55 a.m. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment in December held close to the prior month’s five-year high, according to the Bloomberg survey.
Share Prices
Stocks have gyrated this week as investors weigh prospects for a budget deal. The Standard & Poor’s 500 Index rose 0.3 percent yesterday, paring the loss for the week to 0.2 percent.
Private employment, which excludes government agencies, rose by 90,000 in November, less than half the prior month’s 184,000 increase that was the biggest since February, economists forecast today’s report will show.
Sandy left about 8 million homes and businesses without power for days after making landfall in New Jersey on Oct. 29. The 26 counties designated as major disaster areas after the storm had an average 1,301 labor force participants per square mile, about 30 times the average labor force density for the U.S. in 2011, according to the Labor Department.
Economists differ on how much Sandy depressed November payrolls. Nomura Securities International Inc. projected a hit of 45,000, Goldman Sachs Group Inc. estimated a reduction of about 50,000, while UBS Securities LLC and Deutsche Bank Securities Inc. put the fallout at 150,000.
Katrina Comparison
Based on comparisons with Hurricane Katrina in 2005, history suggests the “temporary hiring stall” will extend into December, after which employment should “meaningfully recover within a couple of months,” Joe LaVorgna, Deutsche Bank’s chief U.S. economist, said in a Nov. 26 note.
Citigroup Inc. (C) is among companies cutting payrolls. The New York-based bank announced this week it will cut more than 11,000 jobs and pull back from some emerging markets to drive down costs as revenue dries up.
On the brighter side, an early Thanksgiving may have boosted payrolls by about 75,000 last month, according to UBS projections as companies such as retailers took on extra staff sooner than normal.
Businesses that stepped up hiring for the holidays include Macy’s Inc. (M) The second-biggest U.S. department-store chain said it would add about 2,000 more seasonal workers than the 78,000 it hired last year. Toys ‘R’ Us Inc., the world’s largest toy retailer, reported plans to employ 45,000 temporary staff, up 5,000 from the 2011 season.
Post Recession
Through October, the U.S. had recovered 4.5 million of the 8.8 million jobs lost as a result of the 18-month recession that ended in June 2009.
At the same time, hiring and investment is being held back by concern about the so-called fiscal cliff, as well as the global slowdown in growth.
“We’re expecting the same sort of a slow-growth environment -- that’s our best view of 2013,” Fredrik Eliasson, chief financial officer of CSX Corp. (CSX), the largest eastern U.S. railroad, said on a Nov. 28 teleconference with analysts. “There are a lot of uncertainties out there in the world at this point between what’s going on here with the fiscal cliff and between Europe and China.”
Fed officials are considering whether to step up easing to stimulate the economy and trim the jobless rate, which prior to September exceeded 8 percent for 43 consecutive months, the longest stretch in monthly records going back to 1948.
“Although the economy continues to expand, we must grow faster if we are to put all of our jobless workers and idle businesses back to work,” William Dudley, president of the Federal Reserve Bank of New York, said in a Nov. 29 speech. He called the unemployment rate “unacceptably high.”
Bloomberg Survey
================================================================
Nonfarm Private Unemploy U of Mich
Payrolls Payrolls Rate Conf.
,000’s ,000’s % Index
================================================================
Date of Release 12/07 12/07 12/07 12/07
Observation Period Nov. Nov. Nov. Dec. P
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Median 85 90 7.9% 82.0
Average 87 92 7.9% 82.1
High Forecast 145 155 8.1% 84.0
Low Forecast 15 20 7.9% 80.0
Number of Participants 90 50 88 66
Previous 171 184 7.9% 82.7
----------------------------------------------------------------
4CAST 75 95 7.9% 83.5
ABN Amro 80 90 7.9% 82.0
Acciones y Valores 86 --- 8.0% 81.9
Action Economics 110 115 7.9% 82.0
Aletti Gestielle --- --- 7.9% 82.0
Ameriprise Financial 90 95 7.9% 82.5
Banca Aletti 130 141 7.9% 81.0
Bank of the West 124 123 7.9% 82.0
Bank of Tokyo-Mitsubishi 40 --- 7.9% ---
Banorte-IXE 130 --- 7.9% 81.0
Bantleon Bank AG 85 --- 7.9% 81.5
Barclays 50 55 8.0% 83.5
Bayerische Landesbank 107 --- 7.9% ---
BBVA 120 130 7.9% 82.4
BMO Capital Markets 120 --- 7.9% 83.0
BNP Paribas 25 50 8.0% 82.0
BofA Merrill Lynch 60 70 8.0% 81.0
Briefing.com 80 50 8.1% 82.0
Capital Economics 75 --- 7.9% 83.0
CIBC World Markets 87 --- 8.0% ---
Citi 80 --- 7.9% 80.0
ClearView Economics 75 82 8.1% 83.0
Commerzbank AG 110 120 7.9% 83.0
Credit Agricole CIB 80 --- 8.0% 82.0
Credit Suisse 70 70 8.0% 82.0
CTI Capital 77 --- --- ---
Danske Bank A/S 125 135 7.9% 82.4
DekaBank 100 --- 7.9% 84.0
Desjardins Group 110 --- 8.0% 82.5
Deutsche Bank Securities 25 35 8.0% 83.0
Deutsche Postbank AG 120 --- 7.9% 82.0
Exane 115 --- 7.9% 80.0
First Trust Advisors 67 67 7.9% 83.0
FTN Financial 20 25 8.0% 83.0
Goldman, Sachs & Co. 75 --- 7.9% 82.5
Hammer Partners SA 95 --- 7.9% ---
Helaba 100 --- 7.9% 82.0
High Frequency Economics 80 --- 8.0% 81.5
HSBC Markets 125 120 7.9% 82.5
Hugh Johnson Advisors 110 125 7.9% 83.0
IDEAglobal 75 90 7.9% 81.0
IHS Global Insight 100 --- 7.9% 82.0
Informa Global Markets 65 --- 7.9% 82.3
ING Financial Markets 145 145 7.9% 82.0
Insight Economics 25 --- 8.1% 83.0
Intesa Sanpaulo 85 --- 7.9% 83.0
J.P. Morgan Chase 100 110 7.9% 80.0
Janney Montgomery Scott 112 128 7.9% ---
Jefferies & Co. 65 75 8.0% 84.0
John Hancock Financial 118 --- 7.9% ---
Landesbank Berlin 100 --- 7.9% 81.0
Landesbank BW 90 --- 7.9% 81.5
LCA Consultores 79 --- --- ---
Lloyds Bank 85 90 7.9% 82.0
Maria Fiorini Ramirez 80 90 --- ---
Market Securities 58 --- 8.0% ---
MET Capital Advisors 30 20 8.0% ---
Mizuho Securities 125 --- 8.0% 82.0
Modal Asset --- 52 --- ---
Moody’s Analytics 70 115 7.9% 82.5
Morgan Stanley & Co. 15 --- 7.9% ---
National Bank Financial 90 --- 7.9% 81.0
Natixis 100 --- 7.9% 82.0
Nomura Securities 145 155 7.9% ---
Nord/LB 85 --- 7.9% 82.0
OSK Group/DMG 136 --- 7.9% 82.0
Oxford Economics 127 124 7.9% ---
Paragon Research 62 --- 8.1% ---
Pierpont Securities 60 75 7.9% 81.0
PNC Bank 140 150 7.9% ---
Prestige Economics 130 125 7.9% ---
Raiffeisenbank International 50 70 8.0% 82.5
Raymond James 110 115 7.9% 82.2
RBC Capital Markets 95 105 8.0% 81.0
RBS Securities 75 80 7.9% 81.0
Regions Financial 116 --- 7.9% ---
Renaissance Macro Research 50 60 8.0% ---
Santander 75 --- 7.9% ---
Scotiabank 100 --- 7.9% 82.0
SISR 43 48 8.0% ---
SMBC Nikko Securities 20 50 8.1% 80.0
Societe Generale 122 112 7.9% 82.6
Southern Polytechnic State 50 45 8.1% ---
Standard Chartered 105 125 7.9% 83.5
Stone & McCarthy 75 80 7.9% 83.0
TD Securities 105 112 8.0% 83.0
UBS 50 60 8.0% 82.0
UniCredit Research 110 --- 7.9% ---
University of Maryland 135 140 8.0% 83.0
Wells Fargo & Co. 65 --- 8.0% ---
Westpac Banking Co. 70 --- 8.0% ---
Wrightson ICAP 50 50 8.0% 83.0
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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 at cwellisz@bloomberg.net
Sandy Probably Dealt a Blow to U.S. Labor Market in November
Victor J. Blue/Bloomberg
Sandy left about 8 million homes and businesses without power for days after making landfall in New Jersey on Oct. 29.
Sandy left about 8 million homes and businesses without power for days after making landfall in New Jersey on Oct. 29. Photographer: Victor J. Blue/Bloomberg
Dec. 7 (Bloomberg) -- Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors, talks about the outlook for the U.S. labor market and economy. He speaks with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance." Matthew Dowd, Bloomberg political analyst and former chief campaign strategist for President George W. Bush, also speaks. (Source: Bloomberg)
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