September 16, 2019

Storm Slowed Hiring in November, but Services Sector Grew

The ADP National Employment Report, which is closely watched as it comes two days ahead of the government’s monthly national employment report, showed on Wednesday that the private sector added 118,000 jobs during the month, below expectations for a gain of 125,000.

The report largely reinforced economists’ forecast for a weak reading in the Labor Department’s payrolls report on Friday. Economists expect the economy added 93,000 jobs in November, down from 171,000 the month before, according to a Reuters survey.

“It’s close to what the market was expecting. If Friday’s employment report from the U.S. Labor Department comes in similar to this, that would be a good outcome,” said Terry Sheehan, an economic analyst at Stone McCarthy Research Associates.

Wednesday’s data, which also included better-than-expected factory orders and productivity, presented a mixed picture of the American economy. That was partly a reflection of crosscurrents from the storm, as well as difficult budget negotiations in Washington aimed at averting the so-called fiscal cliff, a series of automatic government spending cuts and tax increases at the beginning of next year.

A report on the American services sector showed a similar slowing in hiring during the month. But forward-looking indicators pointed to faster growth as a rise in new orders and business activity helped offset a slowdown in employment and prices.

The Institute for Supply Management said its services index rose to 54.7 last month from 54.2 the month before. The reading topped economists’ forecasts for growth to 53.5, according to a Reuters survey. In the report, 50 marks the divide between growth and contraction.

“The much larger service side of the U.S. economy remains relatively healthy,” said Joseph Trevisani, chief market strategist at Worldwide Markets. “It has so far avoided the contraction in manufacturing, but worse is probably coming in the first quarter of next year as the economy continues to slow.”

Also on Wednesday, a report showed new orders received by factories unexpectedly rose 0.8 percent in October as demand for motor vehicles and a range of other goods offset a slump in defense and civilian aircraft orders. The Commerce Department also revised October’s figures upward on nonmilitary capital goods orders excluding aircraft in a hopeful sign that the slowdown in business investment in recent months might soon draw to a close.

Economists at Barclays said the strong reading, driven by orders and shipments of capital goods, equipment used to make other things, means the economy will grow faster than expected in the fourth quarter. They raised their gross domestic product growth outlook for the quarter to 2.2 percent from 2 percent.

The Labor Department reported that nonfarm productivity increased at an annual rate of 2.9 percent in the third quarter, a faster clip than initially expected, as businesses held the line on hiring even as output surged, with unit labor costs falling at their fastest pace in almost a year.

With the effects of the storm out of the way in the months ahead, hiring is expected to return to its previous trend even if more slowly than most would like to see with the employment rate still hovering near 8 percent.

Mark Zandi, chief economist of Moody’s Analytics, who helps compile the ADP report, said underlying jobs growth was closer to 150,000 in November after discounting the impact of the storm as well as seasonal jobs brought forward at the start of the holiday season.

“Abstracting from the storm, the job market turned in a good performance during the month,” he said. “Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls.”

Article source: http://www.nytimes.com/2012/12/06/business/economy/storm-slowed-hiring-in-november-but-services-sector-grew.html?partner=rss&emc=rss

President Assad of Syria Is Threatened by Faltering Economy

With Syria’s currency weakening, its recession expanding, its tourism industry wrecked and international sanctions affecting most essential sectors, the International Monetary Fund now expects Syria’s economy to shrink this year, by at least 2 percent.

Through nearly seven months of protests and a brutal crackdown that has killed more than 2,900 people, Mr. Assad and his political supporters have demonstrated a cohesiveness that has surprised even his critics. Differences that may exist have stayed inside a ruling clique that draws on Mr. Assad’s own clan and sect, and the security services have yet to fracture.

But analysts in the region and officials in Turkey and the United States say the faltering economy presents a double blow to a government that had once relied on its economic successes as a crucial source of legitimacy. As many Syrians, poor and rich, feel the effects of the revolt in their daily lives, a sense of desperation is echoed in the streets, even in Damascus and Aleppo, the country’s two largest cities and economic centers.

Analysts also point out that Syria could use sanctions to rally its people against a common threat.

While neither has risen up like other Syrian cities, complaints are growing, and American and Turkish officials say they believe that the merchant elite in both cities will eventually turn against Mr. Assad.

“I can no longer afford to buy anything for my family,” said Ibrahim Nimr, an economic analyst based in Damascus, the capital. “I am not making any more money. I am facing difficulties, and I don’t know what to do.”

A businessman in Damascus, who spoke on the condition of anonymity for fear of reprisal, said: “People are not buying anything they don’t need these days. Just barely the necessities.”

American and Turkish officials say that a collapse is not imminent and that the government can probably survive through the end of the year. But they now believe it is possible that the toll of the sanctions and protests could bring down Mr. Assad in 6 to 18 months.

“We’re all waiting for the thing that will crack them,” an Obama administration official said, speaking on the condition of anonymity. “And it will be the economy that will wake everybody up, both those who support him, and Assad and his circle.”

Revenues from oil and gas exports, which account for up to a third of state revenues and are the single biggest source of foreign currency, will dry up at the beginning of November, when a European Union ban on imports will fully come into force.

The unrest has paralyzed the tourism industry, which brings in $7.7 billion a year. Several hotels in Damascus said they did not have any bookings for now or anytime in the future, and some hotel owners said that they closed down in the summer because they could no longer afford to pay salaries and bills.

An owner of a small candy shop in Souk al-Hamidiyeh, an old market in the heart of Damascus, said that he had not seen a single tourist since March, when the uprising against Mr. Assad began.

“And it doesn’t look like we will see tourists anytime soon,” the owner added.

Dik al-Jin, one of the oldest restaurants and the most popular site for weddings and parties in Homs, a city in central Syria where the uprising has the semblance of a civil war, also shut down because of a lack of customers, soon after the demonstrations broke out.

But uncertainties persist over the international strategy to put pressure on the Syrian economy. American and European officials have debated whether the sanctions will end up hurting average Syrians more than the leadership. Some analysts have contended that the government may try to paint itself as a victim and court support by casting the sanctions as a contest of “us against them.”

Indeed, in the 1990s in Iraq, which was hit by comprehensive sanctions, popular anger was often directed at the United Nations and the West, not the government of Saddam Hussein.

For now, and in spite of the fraying economy, the government seems buoyed by a sense of confidence over having blunted some of the mass protests this summer in cities like Hama and Deir al-Zour. Syrian officials also have faced sanctions before, only to weather them and seek to rehabilitate themselves once conditions in the region shift. Syrian officials also received a lift when China and Russia vetoed a resolution in the United Nations Security Council that condemned the violent oppression of antigovernment demonstrators last week.

“I do agree that they’re more confident now than before,” the American official said.

Anthony Shadid and Hwaida Saad contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=be609841cdacefa68ceaf3fb0a60dfa2