By Chris Cermak

WASHINGTON (MNI) – November payrolls data are expected to signal a
strengthening U.S. job market, but not to a level high 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 gains over October are led by initial claims data that has
trended lower over the past few weeks, with the four-week moving average
hitting 394,000 for the week ending November 19, marking the lowest
level since April. Economists forecast initial claims at 390,000 for
Thursday’s release, according to MNI.

The four-week moving average for continuing claims dropped to 3.67
million in the week ending November 12, the lowest level since October
2008, though an outlying rise during the payrolls survey week could hold
back job gains, according to Bob Stein, senior economist with First
Trust Portfolios, who is waiting to see if last week’s continuing claims
data is revised on Thursday.

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.

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
Tuesday.

MNI’s Reality Check survey of temporary help and recruiting firms
also indicates that 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 “Supercommittee”
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 **

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