U.S. payrolls grow more than expected
U.S. employers added more workers than expected in November, the Labor Department reported Friday, as strong hiring in finance, healthcare and other service industries raised expectations that the economy would avoid recession.
Recruiting by financial services firms contributed heavily to a net gain of 132,000 U.S. jobs last month, offsetting weakness in construction and manufacturing. For example, Edward Jones, a St. Louis-based brokerage seeing increased demand from baby boomers preparing for retirement, took on 200 brokers across the country in November and expects to hire 300 this month.
“We are wide open right now,” said Price Woodward, who oversees recruiting for Edward Jones.
Economists said November’s payroll growth, which beat expectations of a 100,000-job net increase, was further evidence that housing and auto-related manufacturing were the economy’s only major weaknesses.
There were other signs of resilience, analysts said.
The unemployment rate ticked up only a tenth of a percentage point, to 4.5%, even though the labor force -- those working or job-hunting -- grew considerably, by 383,000 people. Wage growth moderated to 0.2% last month from 0.4% in October.
The November tally brought employment growth since March to a monthly average of 135,000, down from 175,000 the previous 18 months. Economists said the slower job growth was allowing the economy to let off steam -- reducing inflationary pressures -- without causing widespread hardship on workers.
“It’s deceleration to slow growth, not no growth,” said Michael Strauss, chief economist at Commonfund, a financial management firm for nonprofit institutions. “It’s not a hard landing.”
Slowing wage growth, along with recently reported declines in economic growth and labor costs, should allow the Federal Reserve to hold interest rates steady when it meets Tuesday, Strauss said.
Edward Leamer, director of the UCLA Anderson Forecast, said slowing but steady job growth reflected, in part, manufacturing’s decline. In an increasingly service-oriented economy, swings between booms and slowdowns won’t be as big, he said.
“Slowly, as we move from an industrial period into a post- industrial period, it produces a different kind of cycle,” he said. “Things are going to be flattened out.”
The government revised September’s job gains up by 55,000, to 203,000, and October’s down by 13,000, to 79,000, for a net increase of 42,000.
November’s job increase reflected net increases of 43,000 positions in professional and business services and 28,000 in healthcare. Construction shed 24,000 jobs after falling 29,000 in October. Manufacturing payrolls shrank by 15,000 jobs, with losses concentrated in motor vehicles, furniture and other products for homes and cars.
Outside of the weak sectors, job hunters, especially those with skills, are having an easy go of it, said Roy Krause, president of placement firm Spherion Corp.
“If they are talented individuals, they can find a job,” he said. “We’re encouraging employers to move quickly. If you find a good candidate, you’d better take him because the odds are he’s going to have two offers.”
Some economists went so far as to say the job report suggested that the worst of the current slowdown may be over.
“It is fair to say that the bulk of the slowdown in economic activity is over in the U.S. and that we may have a rebound in 2007 rather than a contraction, as markets are expecting today,” said Eugenio J. Aleman, senior economist at Wells Fargo & Co.
Some analysts also said the moderate employment growth pointed to a continuation of what has been called a Goldilocks economy -- not so hot that it stokes inflation, and not so cool that it kills jobs.
It also might be called the baby boomer economy because the huge cohort is a big factor in its growth, experts said. Hospitals, for instance, are hiring nurses, pharmacists and other caregivers because baby boomers are checking in more often and staying longer than when they were younger.
“So, while admissions are growing a little, our lengths of stay are growing more, which means our staffing needs are higher,” said Matt Gerlach, the Southern California chief administrative officer for hospital operator Providence Health & Services.
November’s growth in healthcare jobs is only the beginning of a long employment expansion in the sector, said Jonas Prising, president of North American operations for placement firm Manpower Inc.
“An aging population is going to require more healthcare,” he said. “This has just started. We’re five years away from when the first baby boomers reach 65.”
Baby boomers also are behind the expansion at Edward Jones, which has added more than 3,000 brokers since 2000. There are “78 million baby boomers looking for financial investment services,” recruitment chief Woodward said, “most of whom are woefully unprepared for retirement.”