Bloomberg News

Hiring Gain in November Probably Failed to Cut U.S. Joblessness

December 07, 2011

Dec. 2 (Bloomberg) -- The pace of hiring in November probably failed to reduce unemployment in the U.S., showing employers are concerned the world’s largest economy may cool, economists said before a report today.

Payrolls climbed by 125,000 workers after an 80,000 increase in October, according to the median forecast of 90 economists surveyed by Bloomberg News. The jobless rate may have held at 9 percent.

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 political wrangling over the U.S. deficit. The scant number of jobs will limit wage gains and deprive consumers of the means to boost spending, which accounts for about 70 percent of the economy.

“We’re seeing job gains that are positive though not impressively so,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “Consumer and business demand is very uncertain. Hiring managers need proof of sales before they’re willing to add workers.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 75,000 to 175,000.

The projected gain in payrolls would bring the average for July through November to 119,000, compared with 131,000 in the first six months of the year.

The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.

Fed Forecasts

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.

Shares Rally

Stocks dropped yesterday after the action by the central banks helped cap the biggest three-day rally in the Standard & Poor’s 500 Index since March 2009. The gauge fell 0.2 percent after climbing 7.6 percent from Nov. 28 through Nov. 30.

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.”

The payrolls report may also show private employment, which excludes government jobs, climbed 150,000 after an October gain of 104,000, economists forecast.

Employment may have gotten a boost from holiday hiring. 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.

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 almost 4,000 aircraft.

Manufacturing, one area of the economy that continues to grow, may have added 9,000 workers, the most in four months, according to the survey median.

--With assistance from Chris Middleton in Washington. Editors: Carlos Torres, Vince Golle

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 in Washington at cwellisz@bloomberg.net


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