Jobs report: Oct. was brighter; did Nov. keep it up?
By Neil Irwin,
The U.S. economy looked brighter in October, with a range of indicators signaling a solid, steady recovery. But did that improvement persist into November? And will it translate into more jobs?
Analysts expect to hear more of the same on Friday morning, when the Labor Department reports on what happened in the job market last month. That is to say, they think that the job growth of recent months continued apace, neither accelerating enough to start bringing the unemployment rate down nor slowing enough to raise fears of another recession.
The consensus prediction is that 125,000 new jobs were added in November, right in line with most estimates of how many jobs need to be added each month to keep up with an ever-growing population. Reflecting that, forecasters also expect the unemployment rate to be unchanged at 9 percent for the third straight month.
That pace would mean job growth had accelerated since 80,000 jobs were added in October. But along with the November report, the Labor Department will announce its revisions to the October numbers. Here we must pay careful attention: For three months running, the agency’s initial report has shown fairly weak job creation, but those numbers have then been revised upward in subsequent months. If that pattern holds, then job growth will turn out to have been stronger in October than the 80,000 number would suggest.
Other data released this week have painted a mixed picture on jobs. The number of people filing new claims for unemployment insurance benefits edged up last week, to 402,000 from a revised 396,000, according to a Thursday report. Still, the rise in claims actually reflects a longer-term downward drift — as recently as September, the nation was averaging 422,000 claims a week.
Also Thursday, the Institute for Supply Management said its index of activity at manufacturing firms rose to 52.7 from 50.8. Numbers above 50 indicate expansion at the nation’s factories. But a question in the survey about plans for hiring showed a gloomier response. Employers’ plans for hiring more workers slipped 1.7 percentage points to an index of 51.8, from 53.5.
On Wednesday, the payroll processing firm ADP said that its count of workers on U.S. payrolls suggests that the private sector gained about 206,000 jobs in November, though ADP’s estimates and the official government data have frequently diverged.
For October, a range of indicators pointed to economic improvement: Retail sales, industrial production and business activity all showed increases, signaling that firms have little choice but to add staff to handle rising business.
But the signs of progress were not uniform. A report last week on October durable goods orders, for example, gave a softer outlook for business investment than earlier data had suggested. And the economy grew at only a 2 percent rate in the July through September quarter, the Commerce Department said last week, less than the 2.5 percent originally estimated.
The question ahead of the November unemployment report, then, is whether we will get a clearer view of where things stand in the U.S. economy: Is the pace of growth — and hence job creation — expanding gradually? Or is the combination of an overhang of debt and deep uncertainty from the financial crisis overseas holding employers back?