US economy adds 146K jobs, rate falls to 7.7 pct.

WASHINGTON (AP) — The pace of U.S. hir­ing remained steady in Novem­ber despite dis­rup­tions from Super­storm Sandy and employ­ers’ con­cerns about impend­ing tax increases from the year-end “fis­cal cliff.”

Com­pa­nies added 146,000 jobs, and the unem­ploy­ment rate fell to 7.7 per­cent — the low­est in nearly four years — from 7.9 per­cent in Octo­ber. The rate declined mainly because more peo­ple stopped look­ing for work and weren’t counted as unemployed.

The gov­ern­ment said Super­storm Sandy had only a min­i­mal effect on the figures.

The Labor Department’s report Fri­day was a mixed one. But on bal­ance, it sug­gested that the job mar­ket is grad­u­ally improving.

November’s job gains were roughly the same as the aver­age monthly increase this year of about 150,000. Most econ­o­mists are encour­aged by the job growth because it’s occurred even as com­pa­nies have reduced invest­ment in heavy machin­ery and other equipment.

“The good news is not that the labor mar­ket is improv­ing rapidly — it isn’t — but that employ­ment growth is hold­ing up despite all the fears over the fis­cal cliff,” said Nigel Gault, an econ­o­mist at IHS Global Insight.

Still, Friday’s report included some dis­cour­ag­ing signs. Employ­ers added 49,000 fewer jobs in Octo­ber and Sep­tem­ber com­bined than the gov­ern­ment had ini­tially estimated.

And econ­o­mists noted that the unem­ploy­ment rate would have risen if the num­ber of peo­ple work­ing or look­ing for work hadn’t dropped by 350,000.

The gov­ern­ment asks about 60,000 house­holds each month whether the adults have jobs and whether those who don’t are look­ing for one. Those with­out a job who are look­ing for one are counted as unem­ployed. Those who aren’t look­ing aren’t counted as unemployed.

A sep­a­rate monthly sur­vey seeks infor­ma­tion from 140,000 com­pa­nies and gov­ern­ment agen­cies that together employ about one in three non­farm work­ers in the United States.

Many ana­lysts thought Sandy would hold back job growth sig­nif­i­cantly in Novem­ber because the storm forced restau­rants, retail­ers and other busi­nesses to close in late Octo­ber and early November.

It didn’t. The gov­ern­ment noted that as long as employ­ees worked at least one day dur­ing a pay period — two weeks for most peo­ple — its sur­vey would have counted them as employed.

Yet there were signs that the storm dis­rupted eco­nomic activ­ity in Novem­ber. Con­struc­tion employ­ment dropped 20,000. And weather pre­vented 369,000 peo­ple from get­ting to work — the most for any month in nearly two years. These work­ers were still counted as employed.

All told, 12 mil­lion peo­ple were unem­ployed in Novem­ber, about 230,000 fewer than the pre­vi­ous month. That’s still many more than the 7.6 mil­lion who were out of work when the reces­sion offi­cially began in Decem­ber 2007.

Investors appeared pleased with the report, though the mar­ket gave up some early gains. The Dow Jones indus­trial aver­age was up 53 points in mid-day trading.

The num­ber of Amer­i­cans who were work­ing part time in Novem­ber but wanted full-time work declined. And a mea­sure of dis­cour­aged work­ers — those who wanted a job but hadn’t searched for one in the past month — rose slightly.

Those two groups, plus the 12 mil­lion unem­ployed, make up a broader mea­sure that the gov­ern­ment calls “under­em­ploy­ment.” The under­em­ploy­ment rate fell to 14.4 per­cent in Novem­ber from 14.6 per­cent in Octo­ber. It’s the low­est such rate since Jan­u­ary 2009.

Since July, the econ­omy has added an aver­age of 158,000 jobs a month. That’s a mod­est pickup from an aver­age of 146,000 in the first six months of the year.

In Novem­ber, retail­ers added 53,000 posi­tions. Temporary-help com­pa­nies added 18,000. Edu­ca­tion and health care also gained 18,000.

Auto man­u­fac­tur­ers added nearly 10,000 jobs. Still, over­all man­u­fac­tur­ing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food man­u­fac­tur­ing that likely reflects the lay­off of work­ers at Hostess.

Paul Ash­worth, an econ­o­mist at Cap­i­tal Eco­nom­ics, noted that hir­ing by pri­vate com­pa­nies was actu­ally bet­ter in Octo­ber than the gov­ern­ment first thought. The over­all job fig­ures were revised down for Octo­ber because gov­ern­ments them­selves cut about 38,000 more jobs than was first estimated.

The U.S. econ­omy grew at a solid 2.7 per­cent annual rate in the July-September quar­ter. But many econ­o­mists say growth is slow­ing to a 1.5 per­cent rate in the October-December quar­ter, largely because of the storm and threat of the fis­cal cliff.

The storm held back con­sumer spend­ing and income, which drive eco­nomic growth. Con­sumer spend­ing declined in Octo­ber, the gov­ern­ment said. And work inter­rup­tions caused by Sandy reduced wages and salaries that month by about $18 bil­lion at an annual rate.

Still, many say eco­nomic growth could accel­er­ate next year if the fis­cal cliff is avoided. The econ­omy is also expected to get a boost from efforts to rebuild in the North­east after the storm.

Posted by Matt Echelberry on Dec 7 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.