U.S. payroll gains pick up; jobless rate unexpectedly drops
By Shobhana Chandra Bloomberg News
WASHINGTON - Payroll gains in the U.S. picked up last month and the jobless rate unexpectedly fell to the lowest level since March 2009, a decline augmented by the departure of Americans from the labor force.
Payrolls climbed 120,000, after a revised 100,000 increase in October, with more than half the hiring coming from retailers and temporary help agencies, Labor Department figures showed Friday in Washington. The median estimate in a Bloomberg News survey called for a 125,000 gain. The unemployment rate declined to 8.6 percent from 9 percent.
“It’s good news, not great news,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Mass., whose forecast for a 125,000 gain in payrolls matched the median forecast in Bloomberg News survey of economists. “The labor market is gradually healing. I wouldn’t take huge comfort that the unemployment rate is falling but some comfort that it’s edging down.”
Companies like DirecTV have said they will keep a tight rein on spending and employment in 2012, reflecting concern over the outlook for demand, Europe’s debt crisis and the U.S. deficit. The scant number of jobs is limiting wage gains and restraining consumers’ ability to boost spending, which accounts for about 70 percent of the economy.
Stock-index futures maintained gains after the figures. The contract on the Standard & Poor’s 500 index expiring this month rose 1.1 percent to 1,257.1 at 9:14 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 2.12 percent from 2.09 percent late yesterday.
Revisions to prior reports added a total of 72,000 jobs to payrolls in September and October.
The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.
“You’d like to see the unemployment rate coming down when people are coming into the job market, not disappearing,” James Glassman, senior economist at JP Morgan Chase & Co. in New York, said in an interview on “Bloomberg Surveillance” with Tom Keene. “That’s probably exaggerating the trend in unemployment.”
Private hiring, which excludes government agencies, rose 140,000 after a revised gain of 117,000. It was projected to rise by 150,000, the Bloomberg survey of economists showed.
Factory payrolls increased by 2,000, less than the survey forecast of a 9,000 increase and following a 6,000 gain in the previous month.
Employment at service-providers increased 126,000, including a 50,000 gain in retail trade at companies hired for the holiday shopping season. The number of temporary workers increased 22,300.
Macy’s Inc., the second-biggest U.S. department-store chain, increased mostly part-time staff 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.
Construction companies shed 12,000 workers. Government payrolls decreased by 20,000. State and local governments employment dropped by 16,000, while the federal government trimmed 4,000 positions.
Average hourly earnings fell 0.1 percent to $23.18, today’s report showed. The average work week for all workers held at 34.3 hours.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- decreased to 15.6 percent from 16.2 percent.
The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 43 percent from 42.4 percent.
The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.
Federal Reserve Chairman Ben S. Bernanke and his colleagues last 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.
Growth in the U.S. and other advanced economies “has been proceeding too slowly to provide jobs for millions of unemployed people,” Fed Vice Chairman Janet Yellen said in a Nov. 29 speech in San Francisco. She called for “urgent” international action to combat a “dearth” of global demand.
Six central banks led by the Fed acted on Nov. 30 to make more funds available to lenders to preserve the global expansion. The move came after European leaders said they failed to boost the region’s bailout fund as much as planned, fueling concern about a possible breakup of the euro bloc.
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.”
Payrolls may pick up as more businesses benefit from increased demand. Boeing Co., the largest U.S. aircraft maker, is hiring about 100 machinists a week as it boosts production by about 60 percent over three years to whittle down a backlog that now stretches to nearly 4,000 aircraft.