Employment Report Estimates/Analysis from Bloomberg:
U.S. November Jobless Rate Seen Rising to 4%: Bloomberg Survey
By Siobhan Hughes and Alex Tanzi
Washington, Dec. 8 (Bloomberg) -- The U.S. unemployment rate probably rose in November after holding at a 30-year low for two months, which would be the latest evidence of a slowing economy, analysts said in advance of today's government report.
The jobless rate probably rose to 4 percent last month from 3.9 percent in October, according to the median of 47 forecasts in a Bloomberg News survey. Unemployment was also 3.9 percent in September and April, and hadn't previously been that low since January 1970.
Companies are scaling back hiring plans as the economy cools. While payrolls probably rose by 148,000 in November after increasing 137,000 a month earlier, the gain would still be less than last year's monthly average of 229,000.
``Employers are still hiring, but much less aggressively and not by enough to forestall a rise in unemployment,'' said Mark Zandi, chief economist at Economy.com in West Chester, Pennsylvania. ``The unemployment rate is likely to rise in coming months as the economy continues to grow more slowly.''
The Labor Department is scheduled release its report at 8:30 a.m. EST. Analysts expect it will also show average hourly earnings rose 0.3 percent in November, less than the 0.4 percent October increase.
A rise in the jobless rate may give Federal Reserve policy- makers the final evidence they need to declare the risks facing the economy are balanced between inflation and too-slow growth. That stance -- which economists tend to call a ``neutral bias'' -- is considered a prelude to lower interest rates.
The Fed's policy-setting Open Market Committee next meets on Dec. 19.
Fed Policy
Central bankers have kept the target interest rate for overnight loans between banks at a nine-year high of 6.5 percent since May to keep the economy from overheating and inflation from accelerating. Since February, they have issued warnings that the risks to the economy leaned toward accelerating inflation.
Higher unemployment ``would really put the nail in the coffin that the Fed will move to the neutral direction and eventually ease interest rates,'' said Mary Dennis, senior economist at Merrill Lynch & Co. in New York. She predicted that Fed policy- makers will cut borrowing costs in March.
Layoffs at auto factories are prompting more people to submit claims for state unemployment benefits. DaimlerChrysler AG idled plants in Detroit; Brampton, Ontario; and Toledo, Ohio, last week, affecting 13,600 workers. Ford temporarily shut its Avon Lake, Ohio, plant, affecting 1,600 workers.
The total number of workers collecting jobless benefits surged by 109,000 to 2.338 million during the week ended Nov. 18, the same week the government conducted its survey for the monthly employment report.
Jobless Claims
That week's total number of people on unemployment rolls was the highest since the week of July 25, 1998. The insured unemployment rate rose to 1.9 percent in the week ended Nov. 18, the highest since July 17, 1999.
First-time jobless claims also have been rising, reaching a two-year high during Thanksgiving week. ``The recent increase in initial unemployment insurance claims and the level of insured unemployment may be an early harbinger of an easing'' of demand for workers, said Fed Chairman Alan Greenspan in a speech Tuesday.
Yesterday, government figures showed the average number of workers filing new claims for jobless benefits rose to a 2 1/2 year high last week as layoffs at auto plants and steel mills hasten a slowdown in labor demand.
The four-week moving average of initial claims rose by 1,250 to 345,250 for the week ended Dec. 2, the highest since mid-July 1998, when strikes hobbled production at General Motors Corp. and many of its suppliers.
Factories aren't the only businesses reducing demand for workers. Job cuts at Internet companies rose 55 percent in November from the previous month, according to the job-placement firm Challenger, Gray & Christmas Inc.
Internet Blues
Viant Corp, an Internet consulting company, said it will cut 125 jobs, or 17 percent of its workforce, and close its Dallas office to reduce costs. Ventro Corp., a provider of online marketplace services, said it will shut down its Chemdex and Promedix units and fire about 235 employees to stop running its own electronic commerce sites.
Meantime, retailers may be showing greater caution about hiring for the holiday shopping season as consumer spending cools. ``It's going to be hard to take on as many workers as they usually plan on at that season,'' said Carol Stone, senior U.S. economist at Nomura International Inc. ``Retail stores have been running below planned sales for several months.''
Target Corp.'s Mervyn's California, a chain based in San Francisco, had planned to hire about 10,000 temporary workers, or about 50 per store, ahead of the holiday shopping season. Target missed sales forecasts last week as U.S. retailers' same-store sales fell 2.6 percent.
Bloomberg Survey
FIRM Unemploy Avg Hrly Nonfarm
Rate Earnings Payroll
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Number of replies 47 42 48
MEDIAN 4.0% 0.3% 148
AVERAGE 4.0% 0.3% 145
High Forecast 4.1% 0.4% 240
Low Forecast 3.9% 0.2% 75
Previous 3.9% 0.4% 137
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ABN Amro 4.0% n/a 150
Argus Research Corp. 3.9% 0.4% 175
Aubrey G. Lanston & Co. 4.0% 0.3% 145
Banc of America Sec. 4.0% 0.2% 155
Banc One Investment Adv. 4.0% 0.3% 150
Barclays Capital 4.0% 0.2% 130
Bear Stearns 4.1% 0.2% 135
Bank of Tokyo- Mitsub. 4.0% 0.3% 185
Bondtalk.com 4.1% 0.3% 75
Briefing.com 4.0% 0.3% 130
CIBC World Markets 4.0% 0.4% 125
ClearView Economics 4.0% 0.3% 165
Credit Suisse FB 4.1% 0.2% 130
Daiwa Securities 4.0% n/a 165
Deutsche Bank Research 3.9% 0.2% 150
First Tennessee Capital 4.0% 0.2% 100
First Institutional 3.9% 0.3% 240
First Union 4.0% n/a 150
Fleet Global Mkts 4.1% 0.3% 110
Fortis Bank NV n/a 0.2% 150
Greenwich Capital 4.0% n/a 165
Griffin, Kubik, Stephens 4.1% 0.3% 115
High Frequency Economics 4.0% 0.3% 125
HSBC Markets 4.0% 0.3% 95
IFR 4.1% 0.3% 125
I.D.E.A. 4.1% 0.3% 155
J.P. Morgan 4.1% 0.3% 110
Lehman Brothers 4.0% 0.3% 180
Merrill Lynch 4.0% 0.3% 145
MFR 3.9% n/a 175
Morgan Stanley 4.0% 0.2% 125
Municipal Market Data 4.0% n/a 148
National Bank Financial 4.0% 0.3% 148
National City Bank 4.0% 0.3% 190
Nesbitt Burns 4.0% 0.3% 140
Nomura 3.9% 0.4% 137
Optima 4.0% 0.3% 150
Paribas 4.0% 0.4% 145
Ried, Thunberg & Co. 4.0% 0.3% 200
Royal Bank of Scotland 4.0% 0.3% 165
Salomon Smith Barney 4.1% 0.3% 75
Scotiabank Group 4.0% 0.4% 125
Societe Generale 3.9% 0.2% 200
Standard & Poor's MMS 4.0% 0.3% 150
Starboard Cap. Markets 4.1% 0.3% 150
Stone & McCarthy 3.9% 0.2% 140
UBS Warburg LLC 4.1% 0.3% 125
Wrightson 4.1% 0.3% 150
Best Regards, J.T. |
