Slow growth likely fueled modest November hiring
WASHINGTON (AP) — Employers likely added more jobs in November, encouraged by signs of modest economic growth. But the gains aren't expected to be enough to lower the unemployment rate.
Economists forecast that employers added a net 125,000 jobs last month, an improvement from October's gain of 80,000. The unemployment rate is expected to stay at 9 percent for the second straight month.
Some economists have revised their estimates even higher — to roughly 150,000 — after a spate of positive economic reports. And payroll provider ADP said Wednesday that private companies added 206,000 jobs last month.
Still, analysts say that while the economy is growing at a steady pace, it's not accelerating enough to prompt employers to hire more aggressively.
And Europe's financial crisis threatens to slow U.S. growth next year. A recession in Europe could reduce U.S. exports, hurt global financial markets and dampen business confidence.
Paul Ashworth, an economist at Capital Economics, estimates that the economy will expand 2.5 percent in the last three months of this year. But he expects growth to slow to 1.5 percent in 2012, partly because of the crisis in Europe.
"Things are getting a bit better, but perhaps only temporarily," Ashworth said.
Weak job growth means companies don't have to raise pay to keep their employees. Fewer jobs and lower pay leaves consumers with less money to spend. That's holding back economic growth.
In the past three months, the economy has added an average of 114,000 net jobs per month. That's barely enough to keep up with population growth. In the first four months of this year, the economy generated an average of 179,000 jobs per month.
For now, most recent economic reports have been positive.
Factories are expanding. The Institute for Supply Management, a trade group of purchasing managers, said Thursday that its manufacturing index rose to 52.7 in November, up from 50.8 in October. Any reading above 50 indicates expansion.
The ISM's report also found that new orders and production both rose to seven-month highs. That's a good sign for future output. Even export orders increased, despite the turmoil overseas.
Retailers reported a strong start to holiday sales over the Thanksgiving weekend, consumer confidence surged in November to the highest level since July, and Americans' pay rose in October by the most in seven months.
Car sales also rose sharply in November, normally a lackluster month for the auto industry. Chrysler, Ford, Nissan and Hyundai all reported double-digit gains on Thursday, compared to a year ago.
Another report Thursday showed that U.S. builders spent more in October on new homes, offices and shopping centers. Construction spending rose for a third straight month, the Commerce Department said. Despite the gains, overall construction spending remained depressed.
Those reports have caused many economists to forecast a pickup in growth in the final three months of the year, to about a 3 percent annual rate. That would be an improvement from growth of 2 percent in the July-September period.