Job Market Strengthened as the Year Wound Down

One survey showed that private hiring increased last month, while another said that layoffs declined and a third showed that applications for unemployment benefits stayed near a four-year low.

The data led some economists to raise their forecasts for December job growth one day before the Labor Department releases its closely watched employment report.

“The job market held firm in December despite the intensifying fiscal cliff negotiations,” said Mark Zandi, chief economist at Moody’s Analytics. “Businesses even became somewhat more aggressive in their hiring at year end.”

The most positive sign came from ADP. Its monthly employment survey showed businesses added 215,000 jobs last month, the most in 10 months and much higher than November’s total of 148,000.

Economists tend to approach the ADP survey with some skepticism because it has diverged sharply at times from the government’s job figures.

But some economists were also hopeful after noting that businesses were less inclined to cut jobs last month.

The consulting firm Challenger, Gray Christmas said that the number of announced job cuts fell 43 percent in December from November, and that overall planned layoffs in 2012 fell to the lowest level since 1997.

The weekly number of people who applied for unemployment figures rose by 10,000, but the four-week average was little changed at 360,000 last week. That’s only slightly above the previous week’s 359,750, which was the lowest since March 2008.

Most economists expect the Labor Department report will show that employers added about 150,000 jobs last month and that the unemployment rate stayed at 7.7 percent. The economy has added about 150,000 jobs a month, on average, over the last two years. That’s too few to rapidly lower the unemployment rate.

Even with modest gains in hiring, the unemployment rate remains high. It fell to 7.7 percent in November from 7.9 percent in October. The number of people receiving jobless benefits fell to 5.4 million in the week ended Dec. 15, the latest data available. That’s down about 70,000 from the previous week.

Some economists saw potential for stronger gains after seeing Thursday’s data. Joseph LaVorgna, chief United States economist at Deutsche Bank, raised his forecast for job growth in December to 190,000 jobs, from 150,000.

Credit Suisse also raised its forecast to 185,000, from 165,000. Still, economists remained cautious about where the job market is headed.

While Congress and the White House reached a deal this week that removed a threat of tax increases for many Americans, they postponed the more difficult decisions on spending cuts and on raising the nation’s $16.4 trillion borrowing limit by late February.

Article source: http://www.nytimes.com/2013/01/04/business/economy/more-americans-seek-jobless-benefits.html?partner=rss&emc=rss