2014 Government Regulations & Business Summit
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By Shobhana Chandra
WASHINGTON- Payrolls rose more than anticipated in November and the jobless rate fell to an almost four-year low, indicating superstorm Sandy had little effect on the U.S. labor market.
Employment climbed by 146,000 following a revised 138,000 gain in October that was less than initially estimated, Labor Department figures showed today in Washington. The median estimate of 91 economists surveyed by Bloomberg called for a gain of 85,000. Sandy “did not substantively impact” the data, the agency said. The unemployment rate fell to 7.7 percent, the lowest since December 2008, as size of the labor force shrank.
Gains in hiring indicate consumer spending, the biggest part of the economy, will keep expanding. At the same time, concern about more than $600 billion in fiscal tightening slated for early next year threatens growth and may set back employment, one reason Federal Reserve policy makers are weighing increasing stimulus.
“We’re making progress in the labor market,” Michael Gapen, a New York-based senior economist at Barclays Plc, said before the report. “We expect a return to a pace of hiring that suggests we’re moving in the right direction. It’s not as fast as policy makers would like, but employment is growing.”
Bloomberg survey estimates ranged from increases of 15,000 to 145,000 after a previously reported 171,000 gain in October. The revision to the October payrolls figure reflected a 51,000 drop in government jobs.
The unemployment rate in November was forecast to hold at 7.9 percent, according to the survey median. Projections ranged from 7.9 percent to 8.1 percent.
The poll of households, used to calculate the jobless rate, showed that 369,000 people were not at work because of bad weather during the survey week. The average of the last 10 Novembers was 70,000. The Labor Department said it conducted the survey a week earlier than typical because of the Thanksgiving holiday.
Private payrolls, which exclude government agencies, rose to 147,000 in November. They were projected to rise by 90,000, the survey showed.
The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, from the prior month’s 63.5 percent.
Factory payrolls decreased by 7,000 as job losses in food manufacturing and chemicals more than offset gains at automakers.
A rebound in auto purchases after Sandy signals carmakers and dealers may continue to boost employment. Industry sales of cars and light trucks rose to 15.5 million at an annual rate in November, the best pace since February 2008, according to Ward’s Automotive Group.
Employment at private service-providers increased by 169,000 in November, today’s report showed. Payrolls at construction companies dropped by 20,000 workers.
Average hourly earnings climbed to $23.63 from $23.59 in the prior month. The average work week for all workers held at 34.4 hours.