Here’s what to look for when the Labor Department issues its November U.S. employment report today at 8:30 a.m. in Washington:
-- PAYROLLS, JOBLESS RATE: Employers added a net 230,000 workers in November after a 214,000 increase a month earlier, according to the median estimate of economists surveyed by Bloomberg. Such a gain, barring any downward revisions to prior months, would already make 2014 the strongest year for payroll growth since 1999. It would also mark the 10th straight month employment has increased by more than 200,000, the longest such stretch since the 19 months that ended in March 1995. The unemployment rate, derived from a separate survey of households, is projected to hold at 5.8 percent, the lowest since July 2008.
-- “The labor market is in reasonably good shape,” said Thomas Simons, a money market economist at Jefferies LLC in New York. Jefferies economists forecast a
235,000 gain in November payrolls. “It has been making pretty strong moves since earlier this year when we broke into the expansion phase of the labor market cycle.”
-- HOURLY EARNINGS: Even with the stronger job growth, figures from the employment report show wages have been slow to respond. Average hourly earnings are projected to climb 2.1 percent in the 12 months ended in November. In the 12 months ended in October, wages rose 2 percent, matching the average since the expansion began in June 2009. By contrast, other Labor Department pay measures have shown bigger increases.
-- “Wages are particularly interesting because we have seen signs, if you look at the employment cost index, private wages and salaries finally moved higher last quarter,” said Kathleen Bostjancic, a financial-market economist at Oxford Economics in New York. “So we’d like to see that confirmed in the average hourly earnings data and to see indications that maybe it’s rising even more.”
-- Federal Reserve policy makers will take into account such data as they weigh the first increase in borrowing costs since 2006. The next meeting of the Fed’s Open Market Committee is Dec. 16-17, and a majority of policy makers expect they will start raising rates at some point next year.
-- Fed Vice Chairman Stanley Fischer this week signaled officials are closer to dropping a vow to keep interest rates low “for a considerable time” and will stress economic data to guide the first increase.
-- HOLIDAY HIRING: United Parcel Service Inc. is among companies that have been adding temporary workers to manage a surge in shipments of holiday gifts. This year, they may have taken on more help because in 2013, “both UPS and FedEx were understaffed going into the Christmas season,” Raymond Stone, an economist at Stone & McCarthy Research Associates, wrote in a Dec. 2 note to clients. “This resulted in disruptions in delivery services including a higher incidence of late deliveries. These companies have taken steps not to let that happen again this year.”
-- UPS, the world’s biggest package delivery company, has been in the process of hiring as many as 95,000 people to help deliver 585 million packages in December. So if the November payrolls report shows “an outsized sort of number on Friday, that’d be the first place I’d look,” said Brett Ryan, a U.S. economist with Deutsche Bank Securities Inc. in New York.
-- Economists at JPMorgan Chase & Co. wrote in an e-mail to clients that they project a 30,000 increase in payrolls at couriers and messenger services “based on news reports of more aggressive seasonal hiring than normal for the related firms.”
-- LONG-TERM UNEMPLOYMENT: The number of people out of work for 27 weeks or longer dropped 28 percent in the year ended in October to 2.92 million, according to figures from the Labor Department’s household survey. That compares with a 14 percent decrease in those who’ve been jobless for a shorter period.
-- “The number of long-term unemployed is an important indicator of excess labor-market slack,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, wrote in a research note. The decrease over the past year means “excess slack is being rapidly absorbed. Eventually, this will put significant upward pressure on wages.”
-- LABOR FORCE, HOUSEHOLD EMPLOYMENT: Both the labor force and the household measure of employment jumped in October, suggesting increasingly confident Americans are streaming back in the workforce and finding jobs. That lowered the jobless rate and pushed up the participation rate and the share of the population in the workforce.
-- While these measures are very volatile from month to month, look for additional, smaller increases in both for November, said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut. That means, odds favor another decline in the unemployment rate, he said.
-- Recently, “the data have been unambiguous,” Stanley wrote in a research report. “No matter how you slice it, the labor market is rapidly absorbing slack.”
-- With assistance from Michelle Jamrisko and Kristy Scheuble in Washington.
No comments:
Post a Comment