Payrolls, Manufacturing Probably Grew as U.S. Recovery Picked Up Into 2011

Payrolls and manufacturing probably expanded in November as the U.S. recovery showed signs of a pickup heading into 2011, economists said before reports this week.
Employment increased by 145,000 workers this month after a 151,000 gain in October that marked the biggest advance since May, according to the median forecast of 67 economists surveyed by Bloomberg News ahead of Labor Department data on Dec. 3. A report from factory purchasing managers may show assembly lines kept churning as exports and business spending climbed.
More jobs and bigger paychecks are giving consumers the confidence and means to spend, brightening the outlook for retailers like Lord & Taylor and Macy’s Inc. during the holiday season. At the same time, payrolls aren’t growing fast enough to lower the jobless rate, one reason why Federal Reserve policy makers have said they will keep priming the monetary pump.
“We’re still in the early stages of the labor-market recovery,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We’re seeing a lot of strength in the retail sector and we’re certainly seeing a string of consistency in private payroll growth.”
The jobless rate was 9.6 percent for a fourth consecutive month in November, according the survey median. It would be the 16th month of joblessness at 9.5 percent or higher, the longest such stretch since records began in 1948. The worst recession since the 1930s caused the loss of 8.4 million jobs.
Fed Action
Fed policy makers this month began buying Treasury securities as part of a plan to pump as much as $600 billion more into the financial system in a bid to keep interest rates low and spur growth. Chairman Ben S. Bernanke has been among those saying the recovery has been too slow, keeping unemployment too high and leading to a deceleration in inflation that raises the risk of deflation, or sustained and damaging price decreases.
The central bank’s report on regional economic activity, known as the Beige Book, will be released on Dec. 1. The anecdotal information will help policy makers frame the discussion of the economy when the central bank next meets on Dec. 14.
The economy feels “a lot more stable this year,” Brendan Hoffman, chief executive officer of department-store chain Lord & Taylor, said in a Nov. 26 interview with Betty Liu on Bloomberg Television’s “In the Loop” program. “We definitely hired more people for this season, and our hope is that we’ll keep a lot of them as we go into next year.”
More Hiring
Employment for the holiday-shopping season at Lord & Taylor, which is owned by the buyout firm NRDC Equity Partners LLC, is up 16 percent this year from last, Hoffman said.
The improving spending outlook has helped boost retailer shares. The Standard & Poor’s Supercomposite Retailing Index, which includes Amazon.com Inc. and Macy’s, has climbed 6.9 percent this month and reached a three-year high on Nov. 24. The broader S&P 500 Index gained 0.5 percent since Oct. 29.
Manufacturing, the industry leading the U.S. recovery that began in July 2009, expanded in November for a 16th consecutive month, economists said ahead of a Dec. 1 report from the Institute for Supply Management. The group’s factory index this month was little changed at 56.5, with readings greater 50 signaling expansion.
The Tempe, Arizona-based ISM’s gauge of services, which represent almost 90 percent of the economy, climbed in November to the highest level in six months, the Bloomberg survey showed ahead of the Dec. 3 report.
Gaining Confidence
Employment gains are helping to boost consumer sentiment. The Conference Board’s confidence index climbed to 52.6 this month from 50.2 in October, economists said ahead of a Nov. 30 report from the New York-based research group.
Housing is among the areas still struggling. Home prices in 20 cities over the 12 months through September climbed at the slowest pace since the year ended in February, according to the Bloomberg survey. The S&P/Case-Shiller home-price index is due Nov. 30.
Pending sales of U.S. existing homes fell 1 percent in October after declining 1.8 percent the previous month, economists said ahead of a Dec. 2 report from the National Association of Realtors.

Bloomberg Survey

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                        Release    Period    Prior     Median
Indicator                 Date               Value    Forecast
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Case Shiller Monthly MOM 11/30     Sept.     -0.3%     -0.4%
Case Shiller Monthly YOY 11/30     Sept.      1.7%      1.0%
Chicago PM Index         11/30      Nov.      60.6      60.0
Consumer Conf Index      11/30      Nov.      50.2      52.6
Productivity QOQ%         12/1      3Q F      1.9%      2.3%
Labor Costs QOQ%          12/1      3Q F     -0.1%     -0.2%
ISM Manu Index            12/1      Nov.      56.9      56.5
Construct Spending MOM%   12/1      Oct.      0.5%     -0.4%
Initial Claims ,000’s     12/2     27-Nov     407       425
Pending Homes MOM%        12/2      Oct.     -1.8%     -1.0%
Nonfarm Payrolls ,000’s   12/3      Nov.      151       145
Private Payrolls ,000’s   12/3      Nov.      159       155
Unemploy Rate %           12/3      Nov.      9.6%      9.6%
Hourly Earnings MOM%      12/3      Nov.      0.2%      0.2%
Hourly Earnings YOY%      12/3      Nov.      1.7%      1.7%
Avg Weekly Hours          12/3      Nov.      34.3      34.3
ISM NonManu Index         12/3      Nov.      54.3      54.8
Factory Orders MOM%       12/3      Oct.      2.1%     -1.1%

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http://www.bloomberg.com/news/2010-11-28/payrolls-manufacturing-probably-grew-as-u-s-recovery-picked-up-into-2011.html