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Harry Dope
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Payrolls Grow by Strong 166,000 in Oct.
Friday November 2, 8:56 am ET
By Jeannine Aversa, AP Economics Writer
Payrolls Grow by 166,000 in October, Jobless Rate Holds Steady, Labor
Department Reports
WASHINGTON (AP) -- Employers boosted payrolls by a surprisingly strong
166,000 in October, the most in five months, an encouraging sign that the
nation's employment climate is holding up relatively well against the
strains of a housing collapse and credit crunch. The Labor Department's
report, released Friday, also showed that the unemployment rate held steady
at 4.7 percent for the second month in a row. It's a figure that is
considered low by historical standards.
Job gains were logged for professional and business services, education and
health care, leisure and hospitality, and for the government. Those
employment increases more than offset jobs losses in manufacturing,
construction and retail -- casualties of the problems plaguing the housing
market.
The latest snapshot of employment conditions around the country was better
than economists were anticipating. Economists were forecasting payrolls to
grow in October by about half the pace seen -- around 80,000. They did
correctly predict the unemployment rate would be unchanged.
Still, the trend this year has been toward softer job growth. And, that is
beginning to show up in wages.
Average hourly earnings rose to $17.58 in October, a modest 0.2 percent
increase from September. Economists were forecasting a slightly larger, 0.3
percent increase. Over the past 12 months, wages were up 3.8 percent.
Wage growth supports peoples' spending, a major shaper of overall economic
activity.
A faltering job market can crimp wage growth. That could lessen people's
appetite to spend, raising trouble for the economy.
The state of the nation's employment climate is a crucial factor determining
whether the economy will, in fact, weather the financial storm. So far,
decent job creation and solid wage growth have helped to offset some of the
negative forces hitting some individuals from the housing slump, weaker home
values and harder-to-get credit.
To be sure, problems challenging the economy are hitting some industries and
workers hard. The construction industry cut 5,000 jobs, factories slashed
21,000 positions and retailers eliminated nearly 22,000 in October.
But strength in hiring elsewhere blunted those losses. Professional and
business services added 65,000 jobs, education and health care industries
expanded employment by 43,000. Leisure and hospitality added 56,000
positions and the government boosted payrolls by 36,000.
The economy, which grew at a brisk 3.9 percent annual rate in the third
quarter, is expected to slow to about half that pace or less in the current
October-to-December quarter. The toll of the housing collapse and credit
crunch are expected to catch up to consumers and chill their spending.
"The pace of economic expansion will likely slow in the near term, partly
reflecting the intensification of the housing correction," Federal Reserve
policymakers said Wednesday as they decided to lower their key interest rate
again.
The Fed sliced its key rate by one-quarter percentage point to 4.50 percent
to protect the economy from undue economic weakness in the months ahead. It
was the second rate reduction in six weeks. At the same time, the Fed hinted
that it may not need to cut rates again for a while.
As economic growth slows, the unemployment rate probably will creep up to
around 5 percent by the end of this year or early next year, economists say.
Many analysts believe the country will be able to avoid a recession but they
warn that the odds of one occurring have grown since the beginning of this
year.
Complicating the outlook and the Fed's job: surging energy prices. Oil
prices have hit record highs in recent days and are hovering past $95 a
barrel.
If high oil prices boost the costs of many other goods and services,
inflation can spread through the economy. High energy prices also can cause
people and businesses to cut back on other types of spending, putting
another damper on economic growth.
--
Meanwhile, Hillary hires Berger as a consultant on her campaign. Consider
that move in light of what she said regarding the commutation of Scooter
Libby's sentence:
"This commutation sends the clear signal that in this administration,
cronyism and ideology trump competence and justice."- Sen. Hillary Rodham
Clinton, D-N.Y.
Friday November 2, 8:56 am ET
By Jeannine Aversa, AP Economics Writer
Payrolls Grow by 166,000 in October, Jobless Rate Holds Steady, Labor
Department Reports
WASHINGTON (AP) -- Employers boosted payrolls by a surprisingly strong
166,000 in October, the most in five months, an encouraging sign that the
nation's employment climate is holding up relatively well against the
strains of a housing collapse and credit crunch. The Labor Department's
report, released Friday, also showed that the unemployment rate held steady
at 4.7 percent for the second month in a row. It's a figure that is
considered low by historical standards.
Job gains were logged for professional and business services, education and
health care, leisure and hospitality, and for the government. Those
employment increases more than offset jobs losses in manufacturing,
construction and retail -- casualties of the problems plaguing the housing
market.
The latest snapshot of employment conditions around the country was better
than economists were anticipating. Economists were forecasting payrolls to
grow in October by about half the pace seen -- around 80,000. They did
correctly predict the unemployment rate would be unchanged.
Still, the trend this year has been toward softer job growth. And, that is
beginning to show up in wages.
Average hourly earnings rose to $17.58 in October, a modest 0.2 percent
increase from September. Economists were forecasting a slightly larger, 0.3
percent increase. Over the past 12 months, wages were up 3.8 percent.
Wage growth supports peoples' spending, a major shaper of overall economic
activity.
A faltering job market can crimp wage growth. That could lessen people's
appetite to spend, raising trouble for the economy.
The state of the nation's employment climate is a crucial factor determining
whether the economy will, in fact, weather the financial storm. So far,
decent job creation and solid wage growth have helped to offset some of the
negative forces hitting some individuals from the housing slump, weaker home
values and harder-to-get credit.
To be sure, problems challenging the economy are hitting some industries and
workers hard. The construction industry cut 5,000 jobs, factories slashed
21,000 positions and retailers eliminated nearly 22,000 in October.
But strength in hiring elsewhere blunted those losses. Professional and
business services added 65,000 jobs, education and health care industries
expanded employment by 43,000. Leisure and hospitality added 56,000
positions and the government boosted payrolls by 36,000.
The economy, which grew at a brisk 3.9 percent annual rate in the third
quarter, is expected to slow to about half that pace or less in the current
October-to-December quarter. The toll of the housing collapse and credit
crunch are expected to catch up to consumers and chill their spending.
"The pace of economic expansion will likely slow in the near term, partly
reflecting the intensification of the housing correction," Federal Reserve
policymakers said Wednesday as they decided to lower their key interest rate
again.
The Fed sliced its key rate by one-quarter percentage point to 4.50 percent
to protect the economy from undue economic weakness in the months ahead. It
was the second rate reduction in six weeks. At the same time, the Fed hinted
that it may not need to cut rates again for a while.
As economic growth slows, the unemployment rate probably will creep up to
around 5 percent by the end of this year or early next year, economists say.
Many analysts believe the country will be able to avoid a recession but they
warn that the odds of one occurring have grown since the beginning of this
year.
Complicating the outlook and the Fed's job: surging energy prices. Oil
prices have hit record highs in recent days and are hovering past $95 a
barrel.
If high oil prices boost the costs of many other goods and services,
inflation can spread through the economy. High energy prices also can cause
people and businesses to cut back on other types of spending, putting
another damper on economic growth.
--
Meanwhile, Hillary hires Berger as a consultant on her campaign. Consider
that move in light of what she said regarding the commutation of Scooter
Libby's sentence:
"This commutation sends the clear signal that in this administration,
cronyism and ideology trump competence and justice."- Sen. Hillary Rodham
Clinton, D-N.Y.
