Unemployment and Job Cuts in US Riding Coattails of Recovery
Dec. 5 (Bloomberg) -- Employers in the U.S. cut the fewestjobs in November since the recession began, and the unemploymentrate fell, signaling that the recovery is lifting the labormarket out of the worst slump in the post-World War II era.
Payrolls fell by 11,000, figures from the Labor Departmentshowed yesterday in Washington, compared with the medianforecast for a 125,000 decline in a Bloomberg News survey of 82economists. The jobless rate declined to 10 percent.
The dollar strengthened and Treasuries slid as the reportindicated companies may start hiring again after the job marketshrank by 7.2 million since December 2007. Staffing at temporaryemployment agencies jumped the most in five years, and a gain inwages gave consumers more to spend for the holidays.
“This confirms the idea that the recession is over and hasbeen over for several months,” said Neal Soss, chief economistat Credit Suisse in New York. “It doesn’t tell you that we’llhave a strong recovery, especially not a strong rebound in thelabor market.”
The Dollar Index, a gauge of the currency against six majortrading partners, jumped as much as 1.8 percent yesterday.Yields on benchmark 10-year government notes climbed to 3.48percent from 3.39 percent late yesterday. The Standard & Poor’s500 Index was up 0.6 percent to 1,105.98 after earlier rising asmuch as 1.8 percent.
Traders increased bets that the Federal Reserve wouldtighten monetary policy in the third quarter of next year.Yields on the September federal funds futures contract rose by11 basis points. A basis point is 0.01 percentage point.
Record Low Rates
Fed Chairman Ben S. Bernanke has pledged to maintainrecord-low interest rates until joblessness subsides, even as arecovery takes hold.
Google Inc., owner of the world’s most popular searchengine, is hiring again after the company cut back during therecession, Chief Executive Officer Eric Schmidt said last month.The Mountain View, California-based company had about 19,665workers at the end of the third quarter, down from more than20,000 last year.
“We are absolutely planning to increase our headcount andwe’re aggressively trying to find the best talent as we didhistorically,” Schmidt said in a Nov. 11 interview.
Corporate profits climbed 11 percent in the third quarter,the biggest increase in five years, according to CommerceDepartment data. It was the third straight quarter of profitgains, the first such streak since 2006.
Revisions to Data
Revisions added 159,000 to payroll figures previouslyreported for October and September. The October reading wasrevised to show a 111,000 drop in jobs compared with aninitially reported 190,000 decline.
The jobless rate was projected to hold at 10.2 percent,according to the Bloomberg survey of economists. Forecastsranged from 9.9 percent to 10.4 percent.
Christina Romer, President Barack Obama’s chief economist,said that while the jobs report is “good news,” the nationstill needs to be “ready for bumps in the road.”
“We’re on the right path, but I think we do need to beaware that these things do move around,” Romer, head of theWhite House Council of Economic Advisers, said in a BloombergTelevision interview.
The administration won’t seek a second economic stimuluslike the $787 billion package passed earlier this year, WhiteHouse press secretary Robert Gibbs said yesterday. Instead, theadministration is considering using money from the $700 billionTroubled Asset Relief Program, which was initially designed toshore up the financial system, to help the economy.
Budget Deficit
Obama said Dec. 3 at a White House forum on jobs that thebudget deficit, which reached a record $1.4 trillion in fiscal2009, would constrain the government from major initiatives tocreate jobs.
The number of temporary workers increased 52,000 inNovember, yesterday’s report showed, the biggest jump sinceOctober 2004 and the fourth straight rise. Payrolls attemporary-help agencies often turn up before total employmentbecause companies prefer to see a steady increase in demandbefore taking on permanent staff.
The average work week grew to 33.2 hours in November from33 hours, the biggest advance since March 2003. Average weeklyearnings rose to $622.17.
Improvements in the job market were broad-based.
Builders, Restaurants
Payrolls at builders declined 27,000 after falling 56,000the month before. Service industries, which include banks,insurance companies, restaurants and retailers, added 58,000workers after adding 2,000. Retail payrolls decreased by 14,500after a 44,200 drop.
Factory payrolls fell 41,000 after decreasing 51,000 in theprior month. The median forecast by economists called for a dropof 45,000. The decline included a drop of 6,300 jobs in automanufacturing and parts industries.
Financial firms reduced payrolls by 10,000 for a secondmonth.
The so-called underemployment rate -- which includes part-time workers who’d prefer a full-time position and people whowant work but have given up looking -- fell to 17.2 percent from17.5 percent.
Bernanke on Jobs
“Far too many Americans are without jobs, andunemployment could remain high for some time even if, as weanticipate, moderate economic growth continues,” Bernanke saidDec. 3 in testimony to the Senate Banking Committee, which wasconsidering his nomination to a second term as Fed chairman.
Companies including Harley-Davidson Inc. are still trimmingstaff to wring out additional cost savings. The biggest U.S.motorcycle maker this week approved a restructuring plan at itslargest plant, in York, Pennsylvania, which will result in theloss of about 950 union jobs.
By contrast, Infosys Technologies Ltd., India’s second-largest software exporter by revenue, plans to add 1,000employees in the U.S. in the next four to five quarters,according to Chief Financial Officer V. Balakrishnan.
To contact the reporter on this story:Timothy R. Homan in Washington at thoman1@bloomberg.net
Last Updated: December 5, 2009 00:01 ESTSource: Bloomberg
« Back to Business News
Related News
-
ADP Says US Companies Cut Estimated 169000 Jobs Dec 5, 2009 @ 05:17 AM
Dec. 2 (Bloomberg) -- Companies in the U.S. cut anestimated 169,000 jobs in November, according to a privatereport based on payroll data.
-
Stocks narrowly mixed after jobs report Dec 5, 2009 @ 05:17 AM
NEW YORK — Investors are making few moves in early trading Wednesday after a private group's report showed job cuts declined in November for the eighth straight month, but not as much as forecast.
-
Consumer Prices in US Increased 0.3% in October Dec 5, 2009 @ 05:17 AM
Nov. 18 (Bloomberg) -- The cost of living in the U.S. rosemore than forecast in October as Americans paid more for fuel,while so-called core prices held at a pace that supports theFederal Reserve’s forecast for tame inflation.
-
Bernanke Says Reduced Bank Lending, Labor `Headwinds' Restraining Growth Dec 5, 2009 @ 05:17 AM
Nov. 16 (Bloomberg) -- Federal Reserve Chairman Ben S.Bernanke said economic “headwinds” of reduced bank lending anda weak labor market will probably restrain the pace of the U.S.economic recovery, warranting continued low borrowing costs.
-
US Jobless Rate At 26 Year Record Dec 5, 2009 @ 05:17 AM
WASHINGTON (Reuters) - The U.S. jobless rate unexpectedly jumped to 10.2 percent last month, a 26-1/2-year high, adding to pressure on the Obama administration to do more to tackle unemployment even as signs of recovery mount.
