2014 Government Regulations & Business Summit
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By Shobhana Chandra
WASHINGTON – Employers added workers in December at about the same pace as the prior month, and the unemployment rate matched a four-year low, showing sustained gains in the U.S. labor market even as lawmakers were struggling to reach a budget deal.
Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a increase of 152,000. The unemployment rate held at 7.8 percent after the November figure was revised up from a previously reported 7.7 percent.
Improved hiring, hours worked and wages are helping underpin spending at retailers from Macy’s Inc. to Gap Inc., where December sales beat analysts’ estimates. Even bigger advances in employment may depend on lawmakers reaching an agreement on a deficit-reduction plan after Congress this week averted income-tax increases on about 99 percent of households.
“The labor market continues to recover,” Brian Jones, a senior U.S. economist at Societe Generale in New York, said before the report. “The pace of hiring is respectable, and the unemployment rate will gradually keep coming down. With the fiscal cliff having been averted, this should be good for job growth. The labor market will continue to make progress this year.”
Stock-index futures held gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in March rising 0.2 percent to 1,456.3 at 8:51 a.m. in New York. Treasuries fell, pushing up the yield on the benchmark 10-year note to 1.94 percent from 1.91 percent late yesterday.
Bloomberg survey estimates ranged from increases of 80,000 to 305,000. Revisions to prior reports added a total of 14,000 jobs to payrolls in the previous two months.
The economy created 1.84 million jobs for a second straight year.
Annual revisions to the household survey showed the unemployment rate averaged 8.1 percent in 2012, the lowest in four years.
Average hourly earnings climbed 2.1 percent from December 2011, to $23.73, the biggest gain in a year, today’s report showed. The average work week for all workers climbed to six minutes to 34.5 hours.
Private payrolls, which exclude government agencies, rose 168,000 in December after a revised gain of 171,000. They were projected to rise by 155,000, the survey showed.
Rod Prince landed a new position last month as a senior database administrator for Sausalito, California-based Glassdoor, a jobs and career website. In the four weeks leading up to his hiring, Prince said he received phone calls about six different opportunities.
“I now feel pretty confident from a security standpoint,” said Prince, 59. “I’m not really concerned now that I don’t have to pinch money. I feel the economy is doing better.”
In managing databases for Glassdoor, Prince said that job listings are “accelerating quite significantly.”
Factory payrolls increased by 25,000, the most since March and compared with the Bloomberg survey forecast of a 4,000 increase.