Labor Department to post employment data
Employers in the U.S. added a net 115,000 workers to their payrolls in December, ending a quarter in which job creation was the slowest in three years, according to a survey of economists in advance of a government report.
The figure, the median estimate in a Bloomberg News survey, would follow employment gains of 132,000 in November and 79,000 in October.
The Labor Department’s report Friday is expected to show that the jobless rate held at 4.5%, close to a five-year low.
Payroll growth averaged 109,000 a month in the fourth quarter, including the estimated increase for December, making it the smallest quarterly gain since the third quarter of 2003, during which the monthly average was 18,000.
Job growth early this year may continue to be subdued, keeping a lid on wage gains and limiting how fast consumer spending and the economy will grow. So far, increases in payrolls and incomes have been enough to hold the unemployment rate stable and encourage Americans to keep shopping.
“I would expect some weakening in the labor market, reflecting the slowdown in the economy,” said Ken Mayland, president of ClearView Economics in Pepper Pike, Ohio. “I don’t expect wages to continue to accelerate, and with the slower economic growth, wages should not be an inflation concern.”
Income growth that is strong enough to sustain spending without heating up inflation would enable Federal Reserve policymakers to hold the line on interest rates, economists said.
“Contained inflation expectations and continued uncertainty regarding the impact of housing are likely to keep the Fed in wait-and-see mode, and the Fed funds rate unchanged, throughout 2007,” said Drew Matus, a senior economist at Lehman Bros. Holdings Inc. in New York, in a weekly report to clients.
The Fed will release minutes of its December policy meeting Wednesday, delayed a day because of the national day of mourning for President Ford.
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The week ahead
Today
* U.S. financial markets are closed for New Year’s Day.
Tuesday
* National day of mourning for Ford. The New York Stock Exchange and the Nasdaq Stock Market will be closed. The New York Mercantile Exchange will close its trading floor, but electronic trading will be open. Bond markets are expected to close at 11 a.m. PST.
Wednesday
* Institute for Supply Management reports on activity in the manufacturing economy during December.
* Commerce Department reports on construction spending during November.
* Minutes of the Federal Reserve’s Open Market Committee meeting Dec. 12 will be released.
* Automakers release sales figures for December and for all of 2006.
Thursday
* 110th Congress convenes.
* The nation’s largest retailers announce December sales figures.
* Labor Department reports on weekly jobless claims.
* Commerce Department reports on factory orders for November.
* Freddie Mac reports on mortgage rates.
Friday
* Labor Department reports on employment for December.
