By Chris Cermak
WASHINGTON (MNI) – November payrolls data are expected to signal a
mildly strengthening U.S. job market, but not to a level significant
enough to make a dent in the unemployment rate.
Economists surveyed by Market News International put payrolls due
out Friday at 112,000 for November, up from 80,000 in October. Private
payrolls were seen at 145,000, while the unemployment rate is expected
to hold at 9%.
The expected gains over October are fuelled by initial claims data,
which had dropped below 400,000 for three straight weeks before rising
to 402,000 in Thursday’s data release. The four-week moving average
stood at 396,000 in the week ending November 26, compared to 405,000 in
the week ending October 29.
The outlook for continuing claims is more mixed after an unexpected
gains in the last two weeks. The four-week moving average for continuing
claims stood at 3.68 million in the week ending November 19, down from
3.71 million at the end of October. But a rise during the payrolls
survey week to 3.71 million may have held back the November payroll
figures, according to Bob Stein, senior economist with First Trust
Stein also told MNI that hiring in the retail sector, vindicated in
part by strong Black Friday sales last week, should push up November’s
payrolls numbers, while manufacturing should show a “fairly tepid” gain
of about 5,000. The Institute for Supply Management’s manufacturing
survey rose to 52.7 in November, but the employment index fell 1.7
points to 51.8, according to the monthly release Thursday.
A number of economists either raised their forecasts or predicted
“upside risk” to the payrolls consensus after the private ADP Employment
Wednesday reported an unexpectedly strong 206,000 gain in private
payrolls, the most since December 2010, along with revisions totaling
34,000 for the past two months.
While ADP’s record in predicting official non-farm payrolls figures
has been mixed, the Bank of New York-Mellon in a note said it suggests
the Labor Department’s report Friday “is likely to deliver a positive
surprise and further support the improving U.S. outlook.”
Some late optimism has also come from a sharp uptick in consumer
confidence in November, including job prospects, according to the
Conference Board’s survey released Tuesday. The headline index climbed
more than 15 points to 56. Lynn Franco of the Conference Board said
“consumers’ apprehension regarding the short-term outlook for business
conditions, jobs and income prospects eased considerably.”
Yet the November payrolls data, even if better than October, would
still indicate a sluggish labor market that is unlikely to see a strong
pickup in the pace of hiring over the coming months. Economic growth, at
2% in the third quarter, has been rising at a rate more likely to keep
the jobless rate unchanged rather than signal improvement.
“The economy is producing jobs on a net basis, just not at a pace
and volume sufficient to materially reduce the unacceptably high rate of
unemployment,” Atlanta Federal Reserve President Dennis Lockhart said
MNI’s Reality Check survey of temporary help and recruiting firms
also indicates new hires in November were more likely to be contractors
than permanent employees, the result in part of seasonal hires in retail
and with more uncertainty over the economic outlook amid the ongoing
debt crisis in Europe and the congressional “Super committee” failure to
reach a deal on taming the U.S. deficit.
The Federal Reserve District Beige Book Wednesday reported that
hiring across the country was “generally subdued.” It added that,
despite the many workers looking for jobs, some firms were struggling to
find qualified applicants for open spots, especially in “high-skilled
manufacturing and technical positions.”
The November Employment Situation will be released at 8:30 a.m. ET
Friday by the Labor Department.
–Chris Cermak is a Washington reporter with Need to Know News
** Market News International Washington Bureau: 202-371-2121 **