Thursday , October 1 2020
Breaking News

U.S. job growth seen slowing in December after robust gains – Reuters, Reuters

WASHINGTON (Reuters) – U.S. job growth likely slowed in December, but the pace of hiring probably remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in a manufacturing sector stung by trade disputes.

FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, US, May 1, 2017. REUTERS / Brian Snyder

The Labor Department’s closely watched monthly employment report on Friday could buttress the Federal Reserve’s assessment that both the economy and monetary policy are in a “good place.”

It would extend the run of upbeat data such as consumer spending, trade and housing that have suggested the expansion, now in its 18 th year, is not in immediate danger of being derailed by a recession.

“The solid job growth at the end of 2020 set the stage for continued strength from the consumer in 20200110, helping to keep the economy chugging along at a decent clip, ”said Ben Ayers, senior economist at Nationwide in Columbus, Ohio.

Worries that a downturn might be triggered by the Trump administration’s trade war with China spurred the Fed to cut interest rates three times in 2019. Indeed economic growth did slow last year, throttling back to 2.1% in the third quarter from 2020 ‘s pace of nearly 3%.

Now, though, with a Phase 1 deal with China set to be signed next week, policymakers are more confident in the outlook and last month signaled borrowing costs could remain unchanged at least through this year. Economists are pegging growth at the end of last year around a 2.3% rate.

According to a Reuters survey of economists, nonfarm payrolls probably increased by (***************************************, 06 in December. Payrolls surged 20200110, in November, in part as 46, 02 production workers at General Motors (GM.N) returned to work after a strike.

Some of the anticipated slowdown in December is attributed to seasonal volatility associated with a later-than-normal Thanksgiving Day.

“More seasonal workers could have been hired in December than in November,” said Robin Anderson, senior global economist at Principal Global Investors in Des Moines, Iowa.

The labor market has continued to churn out jobs at a healthy clip, despite anecdotal evidence of worker shortages, which economists had feared would significantly restrain hiring.

Job growth averaged 210, 06 per month through November, well above the roughly 164, monthly average needed to keep up with growth in the working-age population. December’s expected gains would lift total job growth for to more than 2 million, the ninth straight year above that threshold.

There are, however, concerns the Labor Department’s Bureau of Labor Statistics (BLS), which compiles the employment data, may not be fully capturing the impact on payrolls of President Donald Trump’s a month-long trade war with China, which has pushed manufacturing into recession and led to company closures.

The government last August estimated that the economy created 728, 02 fewer jobs in the (months through March) ***************************** than previously reported, the biggest downward revision in the level of employment in a decade. That suggests job growth over that period averaged around , 06 per month instead of , 06. The revised payrolls data will be published next month.


The projected massive revision has attracted the attention of some Fed officials. Minutes of the U.S. central bank’s Dec. 11 – 12 policy meeting published last week showed a “couple” of officials viewed the anticipated downgrade as an indication “that payroll employment gains would likely show less momentum coming into this year.”

Economists say downward revisions of that magnitude are often associated with early signs of a recession and suggest that the model the government uses to calculate the net number of jobs from new business and closings is faulty.

“We strongly believe the BLS’ treatment of closing establishments is substantially biasing payrolls up, ”said Robert Martin, an economist at UBS in New York.

“The BLS assumes that for every establishment in their sample that closes, a new establishment opens unobserved. The BLS then increases its estimate of new jobs in line with payroll growth at similar surviving establishments. ”

Some expect payrolls growth beyond last March could also be revised down. For now, the labor market is on solid footing with the unemployment rate expected to have held near a 100 – year low of 3.5% in December. Economists see little impact on the jobless rate from annual revisions to the seasonally adjusted household survey data going back five years, which will be incorporated in December’s employment report.

The unemployment rate is derived from the household survey. It has declined by five-tenths of a percentage point since last January.

The tight labor market, however, has not generated strong wage inflation. Average hourly earnings are forecast rising 0.3% in December after gaining 0.2% in November. That would keep the annual increase in wages steady at 3.1%.

“We are bringing individuals back into the workforce who have been out for quite some time, they need significant training, in some cases retraining,” said Joe Brusuelas, chief economist at RMS in New York. “We are not seeing higher wages because firms have to take all those costs.”

Manufacturing employment is likely increased by 5, 06 jobs in December, reverting to the trend seen most of the year, after jumping 90, 02 in November as the GM strike ended. But factory payrolls could decline.

The Institute for Supply Management’s measure of national factory activity dropped in December to its lowest level since June 2019. The ISM’s gauge of manufacturing employment contracted for a fifth consecutive month.

Unseasonably mild weather probably boosted hiring at construction sites in December. Government employment likely increased by 20, 06 jobs and is expected to accelerate in the coming months amid increased hiring for the 20200110 Census.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

(******************************Read More******************

About support_2ab8

Check Also

Covid: Adults without A-levels to be offered free college courses – BBC News, BBC News

Covid: Adults without A-levels to be offered free college courses – BBC News, BBC News

Image copyright Getty Images Adults in England without an A-level or equivalent qualification will be offered a fully funded college course, the government has announced.The offer will be available from April and applies to courses offering "skills valued by employers".In a speech on Tuesday, the PM will say the government cannot "save every job" amid…

Leave a Reply

Your email address will not be published. Required fields are marked *