December Job Gain in U.S. Probably Capped Best Year Since 2005
Shobhana Chandra, ©2014 Bloomberg News
Published 5:14 am, Friday, January 10, 2014
The addition of 197,000 jobs followed a 203,000 advance the prior month, according to the median forecast of 90 economists in a Bloomberg survey. The projected gain would bring the annual increase to 2.27 million, which was last exceeded eight years ago. The unemployment rate may have held at a five-year low of 7 percent in December.
Ford Motor Co. and Southwest Airlines Co. are among companies taking on more staff as sales improve, which in turn will help sustain the consumer spending that accounts for almost 70 percent of the economy. A pickup in hiring helps explain the Federal Reserve’s decision to begin paring monthly asset purchases aimed at bolstering the expansion.
“We’re seeing a substantial improvement in the labor market,” said Richard DeKaser, a Washington-based corporate economist for Wells Fargo & Co., the largest U.S. home lender. “Monthly payroll gains will be in the 200,000 territory for much of 2014. Growth is beginning to pick up.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from payroll increases of 100,000 to 250,000.
Some economists with projections at the lower end of the range say inclement weather during the week corresponding to the Labor Department’s survey held back the total. Bad weather can affect the payroll count if employees didn’t receive compensation for the entire pay period that included the 12 of the month.
Last month was the coldest December since 2009 and snowfall was 21 percent above normal, according to weather-data provider Planalytics Inc. The second week of December was the coldest during a comparable period in more than 50 years, the firm said.
Today’s figures will include revisions to the household survey, which is used to calculate the monthly jobless rate. Data for the past five years are under review. Joblessness has fallen from a post-recession high of 10 percent, reached in October 2009.
Through November, the U.S. had recovered 7.4 million of the 8.7 million jobs lost as a result of the 18-month recession that ended in June 2009.
Economists also projected that private employment, which excludes government agencies, climbed by 200,000 in December following a 196,000 advance the prior month.
Figures this week from the ADP Research Institute in Roseland, New Jersey, showed companies added 238,000 workers last month, the most since November 2012.
Automakers, coming off their best sales year since 2007, are expanding staff. Dearborn, Michigan-based Ford, the second- largest U.S. automaker, plans to add 5,000 jobs in the U.S. as it introduces 16 new vehicles in North America this year.
Southwest Airlines, which last hired flight attendants from outside the company in 2011, received applications at a rate of 80 a minute, amassing 10,000 resumes for 750 openings. Chief Executive Officer Gary Kelly, in a weekly recorded message in December, said it was “like opening up the floodgates.”
Atlantic Group, an employment company specializing in financial services, is seeing an improvement as businesses gain confidence in the economy, according to founder John Ricco. The firm also is hiring in several divisions as demand picks up in accounting, finance, tax and technology.
“I’m hoping 2014 is really the year of the hire,” Ricco said in a Dec. 24 interview on Bloomberg Radio’s “Taking Stock.” “Confidence is slowly starting to trickle in.”
A rebound in manufacturing in the second half of 2013 has coincided with a pickup in hiring. Today’s report may show payrolls at factories grew by 16,000 in December after a 27,000 gain, according to the Bloomberg survey median.