Bloomberg News

U.S. December Hiring Probably Accelerated for Second Month

January 09, 2012

(Updates with markets starting in seventh paragraph.)

Jan. 6 (Bloomberg) -- Hiring in the U.S. probably accelerated in December for a second month, pointing to a strengthening labor market heading into 2012, economists said before a report this week.

Payrolls climbed by 155,000 workers after rising 120,000 the previous month, according to the median forecast of 84 economists surveyed by Bloomberg News. The unemployment rate rose after dropping in November to the lowest level in more than two years, the report may also show.

Sustained payroll gains are needed to chip away at joblessness and support household spending, which accounts for about 70 percent of the world’s largest economy. At the same time, the financial crisis in Europe and political stalemate over ways to pare the U.S. budget deficit may be prompting companies to hold back amid concern the expansion will slow.

“It’s still moderate employment growth at a respectable pace,” said Sean Incremona, a senior economist at 4cast Inc. in New York. “We still do see a lot of uncertainty in the background that will probably be restraining hiring.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 80,000 to 220,000. The U.S. jobless rate climbed to 8.7 percent in December from 8.6 percent the prior month, which was the lowest since March 2009, according to the survey median.

Today’s report will also include benchmark revisions to the household survey, which is used to calculate the monthly unemployment rate. Data for the past five years are under review.

Jobless Rate

European stocks advanced before the payrolls report, with the Stoxx Europe 600 Index extending its third weekly gain. It was up 0.3 percent to 248.14 as of 9:37 a.m. in London, while London’s FTSE 100 Index rose 0.2 percent.

U.S. index futures were little changed. The March contract on the Standard & Poor’s 500 Index rose less than 0.1 percent.

Employers added 1.45 million workers last year through November. The increase shows the economy has made little headway in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.

The projected payroll gain would bring the average for July through December to 136,000, compared with 131,000 in the first six months of the year.

‘Robust’

The employment report may also show private employment, which excludes government jobs, climbed 178,000 after a 140,000 gain in November.

“Sales are robust, merchandise margins are strong, operating margins are growing,” Alexander Smith, chief executive officer of Fort Worth, Texas-based Pier 1 Imports Inc., said on a Dec. 15 conference call with analysts. “There’s going to be a little more hiring in the first part of the year without a doubt.”

Other companies saw increased demand last month during the holiday shopping season. Same-store sales at U.S. retailers excluding Wal-Mart Stores Inc. rose 3.5 percent in December from a year earlier, according to figures yesterday from the International Council of Shopping Centers.

Recent reports showing faster manufacturing, fewer Americans filing jobless claims, less household pessimism and stabilization in housing have helped spur share prices. The Standard & Poor’s 500 Index has gained 7.4 percent since a recent low on Nov. 28.

In the final three months of 2011, “clear signs emerged that U.S. consumers are more confident and that other underpinnings of our economy are either stable or slowly improving,” Don Johnson, vice president of U.S. sales for General Motors Co., said on a Jan. 4 conference call.

Faster job gains than those generated in 2011 may be needed to reduce unemployment. That’s one reason policy makers remain concerned.

“While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated,” Federal Reserve Chairman Ben S. Bernanke and other members of the Federal Open Market Committee said in a statement at the conclusion of a meeting last month in Washington.

--With assistance from Ainhoa Goyeneche in Washington. Editors: Carlos Torres, Vince Golle

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net


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