Employers add 112,000 new jobs in November
Friday, December 3rd 2004, 8:37 am
News On 6
WASHINGTON (AP) _ U.S. employers pulled back on hiring as they entered the holiday shopping season, adding just 112,000 new jobs overall in November. It was the weakest gain in five months and about half of what economists had forecast.
Still, the overall, seasonally adjusted civilian unemployment rate dropped fractionally _ by 0.1 percentage point _ to 5.4 percent, as more people looking for work found jobs, the Labor Department reported Friday.
Employers' payrolls have expanded by 2.3 million since August 2003, but the monthly pace has been sluggish. Analysts had predicted in advance of Friday's Bureau of Labor Statistics report that about 200,000 new jobs were created last month.
Even October's blockbuster showing was tempered a bit in revised figures. The department lowered from 337,000 to 303,000 its previous estimate of new jobs during that month. Economists say the job boom that month was fueled by hurricane cleanup activity. September's job numbers also were changed, falling 20,000 to 119,000.
But some economists weren't too pessimistic.
``It's not great job growth, but it's decent,'' said Joel Naroff, president of Naroff Economic Advisors. ``It is decent enough to create income and spending,'' which will keep the economy chugging.
Consumer spending accounts for two-thirds of total economic activity, and is being closely watched, especially during this time of the year. Analysts were concerned about the big jump in oil prices earlier this year, which jolted consumers and slowed the overall economy dramatically. Though prices have eased, they may be holding down job growth.
New hiring in the service sector fueled November's overall jobs increase, led by health care, restaurants and hotels. But retailers lost jobs, their payrolls falling by 16,200 last month.
That reflected indications of a disappointing start to the holiday season, as retailers reported lackluster sales for November. The much hoped-for surge in Thanksgiving weekend business failed to materialize.
The manufacturing sector continued to shed jobs for the third straight month, losing 5,000 from its payrolls. The nation's factories, in a long slump, have failed to jump-start hiring in the face of rising competition from low-wage countries such as China.
The weaker-than-expected employment report could fuel concerns that the labor market recovery is stalling. Economists say employers should be adding more than 200,000 new jobs or more each month. Just to keep pace with population growth, about 150,000 new jobs are needed each month. Since August 2003, monthly job creation has averaged 152,000.
In November, the number of people holding more than one job rose by 346,000 to 7.6 million. About 8 million people remain officially categorized as unemployed.
Economists still expect the Fed to raise a key interest rate by one-quarter percentage point to 2.25 percent at its Dec. 14 meeting, the final session of the year.
``The Fed doesn't react emotionally to temporary ups and downs of these numbers,'' Naroff said. ``They're saying, 'Yeah, businesses aren't out there hiring like mad, but they're hiring.'''