By Timothy R. Homan
(c) 2010 Bloomberg News
Friday, December 3, 2010; 12:17 AM
Employment increased by 150,000 last month, according to the median forecast of 87 economists surveyed by Bloomberg News, bringing the rise so far this year to 1.02 million. The advances haven't been large enough to bring down unemployment, which held at 9.6 percent, according to the survey median.
Another report may show service industries, which account for almost 90 percent of the economy, grew last month at the fastest pace since May as more jobs and rising wages boosted holiday sales at retailers like J.C. Penney Co. and Gap Inc. At the same time, the Federal Reserve is concerned joblessness will be slow to retreat, explaining why policy makers announced a new round of monetary stimulus.
"A lot of the hiring we expect to see is from the smaller, newer firms," said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. "The outlook that we're seeing in the near term is really not enough to push the unemployment rate down."
The Labor Department's report is scheduled for 8:30 a.m. Washington time. Estimates for payroll gains ranged from 75,000 to 200,000. Last month's projected increase would be in line with the 151,000 workers employers added in October.
Private payrolls, which exclude government agencies, rose by 158,000 last month after a 159,000 October gain, the survey showed. A similar increase in December would make the fourth quarter the strongest for employment this year, evidence the recovery is picking up. Such payrolls rose by 122,000 a month on average in the third quarter, by 118,000 in the second and by 79,000 in the first.
Economists' projections for the jobless rate, which has been at 9.6 percent since August, varied from 9.4 percent to 9.7 percent. November would be the 16th month of joblessness at 9.5 percent or higher, the longest such stretch since records began in 1948.
Job losses in 2008 and 2009 totaled 8.4 million, pushing unemployment up from 5 percent in December 2007, as the worst recession since the 1930s took its toll.
Fed policy makers last month began buying Treasury securities as part of a plan to pump as much as $600 billion more into the financial system in a bid to keep interest rates low and spur growth. Chairman Ben S. Bernanke has been among those saying the recovery has been too slow, keeping unemployment too high and leading to a deceleration in inflation that raises the risk of deflation, or sustained and damaging price decreases.
A report from the Institute for Supply Management, scheduled for 10 a.m. New York time, is projected to show that the Tempe, Arizona-based group's non-manufacturing index climbed to 54.8 from 54.3 in October. Readings higher than 50 signal expansion.
Improving job prospects are benefiting U.S. retailers. J.C. Penney, the third-largest U.S. department store chain, yesterday said so-called same-store sales climbed 9.2 percent in November, above a projection of 3.3 percent. Apparel retailer Gap posted a 5 percent gain. Overall, sales at more than 30 chains tracked by Retail Metrics Inc. rose 5.3 percent last month from the same time in 2009, the biggest year-over-year gain since March.
The spending outlook has helped boost retailer shares. The Standard & Poor's Supercomposite Retailing Index, which includes Amazon.com Inc. and J.C. Penney, has climbed 9.2 percent since the end of October to reach a three-year high yesterday. The broader S&P 500 Index gained 3.2 percent in the same period.
In an effort to reach out to some of the nation's largest employers, President Barack Obama met with Wal-Mart Stores Inc. Chief Executive Officer Mike Duke at the White House on Nov. 29. The meeting was one of a series of sessions aimed at soliciting the views of companies, with the goal of spurring the recovery and adding jobs.