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With Debt to Sell, Troubled Euro Nations Find Willing Buyers

January 17, 2013 by Leave a Comment

On Thursday, the Spanish Treasury sold €4.5 billion, or $5.9 billion, of debt, including bonds with a maturity of as much as 28 years. The average interest rate paid by Madrid on two-year bonds was 2.71 percent, down from 3.36 percent in December — a level not reached since March of last year.

The interest rate on the benchmark 10-year Spanish bond stood at 5.03 percent Thursday. Last year that rate spiked above 7 percent — a level that many economists believe places an unsustainable burden on governments.

Higher interest rates make it not only more expensive but also more difficult for governments to borrow the money they need. Consistently high borrowing costs helped force Greece, Ireland and Portugal to seek international bailouts.

But the renewed sense of optimism in Spain this week led the government to suggest that the country’s economic recession would not be as deep and prolonged as had been feared. When drafting its 2012 budget, the government had expected the economy to contract 1.5 percent, but officials now expect the final figure for last year to be lower.

“The government is adopting the right measures to overcome the crisis, and these efforts are about to bear fruit,” Foreign Minister José Manuel García-Margallo said at an investment conference here Wednesday. “Foreign investors are coming back.”

But some foreign investors in Mr. García-Margallo’s audience gave a much more cautious reading on the recent market rally, as well as warning that it was too early for talk about an economic turnaround.

“Optimism is the flavor of the day, but perhaps people are overoptimistic,” said Birgitte Olsen, fund manager at Bellevue Asset Management in Zurich. “We’ve now seen some car companies shift their production lines to Spain, but a lot more reforms and work need to be done to return to growth and job creation.”

Still, Ms. Olsen said, “it makes sense for any company that has the opportunity to sell bonds to do it right now.”

Indeed, last year’s trickle of Spanish corporate debt issuance has turned this month into a flow. On Wednesday, Banco Santander sold €1 billion of seven-year bonds at an interest rate of 4 percent. In the first two weeks of January, a handful of other Spanish banks, as well as Telefónica and energy companies including Gas Natural and Red Eléctrica, sold bonds totaling over €7 billion, with most sales heavily oversubscribed.

“The results of some of these Spanish bond issues would have been impossible just three months ago, but it’s unclear to me whether what has now opened is really a long-term window,” said Michael Gierse, a fund manager at Union Investment in Frankfurt, which has €180 billion in assets under management.

The next litmus test for investors, Mr. Gierse said, would come at the end of the month, when the Spanish authorities are expected to lift a ban on the short-selling of all stocks trading on the country’s exchanges. The ban, intended to reduce market volatility, was to be lifted at the end of last October but was then extended by three months to help ailing companies like Banco Popular issue debt. Short-selling lets investors sell borrowed shares in the hope that their price will fall and that they could then be repurchased more cheaply, allowing the investors to pocket the difference.

“Once the short-selling ban gets lifted, we will have a much clearer idea of whether this market rally is for real,” Mr. Gierse said. For now, he added, “I don’t think that investors from outside the euro zone are already back in Spain.”

One reason for such wariness is that investors endured a roller-coaster ride last year.

Article source: http://www.nytimes.com/2013/01/18/business/global/18iht-spaindebt18.html?partner=rss&emc=rss

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More Americans Seek Jobless Benefits

January 3, 2013 by Leave a Comment

WASHINGTON — The number of Americans filing new claims for unemployment benefits rose last week, the Labor Department said Thursday, but the data was too distorted by the holidays to offer a clear reading of labor market conditions.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000, the government said.

A Labor Department official said data for nine states, including California and Virginia, had been estimated last week because of the Christmas and New Year holidays. This suggested the numbers will be revised next week.

The prior week’s figure was revised to show 12,000 more applications than previously reported. Claims data reported for the week ended Dec. 22 had been artificially depressed by the holidays, which resulted in data for 19 states being estimated.

The four-week moving average for new claims, a better measure of labor market trends, rose 250 to 360,000. The claims data has no bearing on December’s national employment report, scheduled for release on Friday.

Employers are expected to have added 150,000 jobs to their payrolls last month, little changed from 146,000 in November, according to a Reuters survey of economists.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid increased 44,000 to 3.25 million in the week ended Dec. 22.

A separate report Thursday said that American private-sector employers added more new jobs than expected last month, helping the job market end 2012 on a high note.

The ADP National Employment Report showed the private sector added 215,000 jobs last month, comfortably above economists’ expectation of a 133,000 gain. The report is jointly developed with Moody’s Analytics.

“The underlying economy has momentum, and the employment data confirms that,” said John Brady, managing director at R.J. O’Brien Associates in Chicago. “The hope and prayer of the market is that our political leaders don’t screw it up.”

November’s private payrolls tally was also revised upward to show a gain of 148,000 from the previously reported 118,000.

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

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Slowing Global Demand Widens Trade Deficit

December 11, 2012 by Leave a Comment

The Commerce Department said on Tuesday the trade gap increased 4.9 percent to $42.2 billion. In a sign of weak domestic demand, imports hit the lowest level in one and a half years.

“The report tells a tale of weakening economic growth momentum both domestically and globally,” said Millan Mulraine, a senior economist at TD Securities in New York.

Economists, who had expected the trade deficit to widen to $42.6 billion in October, said Hurricane Sandy could have disrupted trade flows. The storm, which struck the East Coast in late October, shut ports in New York and New Jersey.

However, the Commerce Department did not indicate that Sandy was a factor. The wider trade gap in October reflected a 3.6 percent decline in exports of goods and services to $180.5 billion. That was the biggest percentage drop in exports since January 2009.

Exports have been one of the pillars supporting the economy since the 2007-9 recession ended. The slide in October’s export growth was telegraphed by weak manufacturing surveys and reflected slowing global demand.

Imports of goods and services fell 2.1 percent, to $222.8 billion, in October, the lowest since April 2011. Economists said the decline in imports was hardly surprising, given a weakening in consumer demand in recent months.

In October, the inflation-adjusted trade deficit narrowed to $46.2 billion from $46.6 billion in September. While that implied trade would make another small contribution to gross domestic product in the fourth quarter, economists said the size of the decline in exports raised the bar high for that.

In addition, a strike by West Coast dock workers in late November and early December most likely reduced trade last month.

A third report showed confidence among small-business owners fell in November; economists pinned that on the fears of deep government spending cuts and higher taxes, which could drain about $600 billion from the economy early next year.

The National Federation of Independent Business said on Tuesday that its optimism index fell 5.6 points to 87.5 last month, the weakest reading since March 2010.

While exports to the 27-nation European Union rose 1.4 percent in October, there were substantial declines in goods shipped to France, Germany, Italy and Britain. Exports to the European Union in the first 10 months of 2012 were down 0.7 percent compared to same period in 2011.

American exports to Latin America also fell in October, and shipments to Japan were down 8 percent.

Although exports to China, which have been growing more slowly than in recent years, surged 23.1 percent in October, imports rose to a record. That pushed the United States’ trade deficit with China to a record $29.5 billion.

Article source: http://www.nytimes.com/2012/12/12/business/economy/decline-in-exports-hurts-us-trade-deficit.html?partner=rss&emc=rss

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Some Economists Doubt Dire Effects From Tax Increases

December 3, 2012 by Leave a Comment

Mr. Kass, the founder of Seabreeze Partners Management, thinks much of the investing world has overestimated how hard the markets and investors would be hit if tax rates on dividends and capital gains rise at the end of the year, as the White House has proposed.

Mr. Kass can look for support to several economists who have studied past changes in tax rates and found that the shifts had less of an impact on investor behavior than was initially expected.

That’s largely because a dwindling number of investors are subject to the taxes on investment gains that are set to rise at the end of the year, with most stocks held in accounts that are exempt from taxes.

For example, only 14.7 percent of American households have mutual funds in taxable accounts, down from as high as 23.9 percent in 2001, according to data from the Investment Company Institute.

Douglas A. Shackelford, an economist who has examined the 2003 legislation that lowered the tax rates on capital gains and dividends, said that when those changes were being put in place “people thought this would be revolutionary,” setting off a wave of changes in the way companies rewarded their investors, and how investors evaluated companies.

In the end, “it made a difference, but it certainly was not revolutionary,” said Mr. Shackelford, a professor of taxation at the University of North Carolina’s business school. The limited number of investors who were subject to the changes in 2003 has grown even smaller today, he said.

While data on the tax status of all stockholders is hard to come by, many economists agree than an increasing proportion of the entire equities market is now held by retirement investors whose holdings are not subject to current tax law; by foreign investors who don’t pay American taxes, or by institutional investors like insurance companies and pension funds that are exempt from taxes.

Sam Stovall, the chief investment strategist at SP Capital IQ, said that even among individual investors who do pay the taxes, many have incomes under $250,000 and would not be subject to the increased rates on investment income proposed by the White House. The result Mr. Stovall is anticipating is that the coming changes will cause “a lot less of a hit than most people are making it out to be.”

Mr. Stovall and others who share his views are not discounting the potential disruption to the financial markets if the White House and Congress fail to reach any agreement on the broad set of tax increases and spending cuts scheduled to hit at the start of the year. The largest of these changes are not on investment income. An increase in the payroll tax, for example, could remove $95 billion from the take-home pay of Americans.

But even if a broad agreement is reached, many strategists are expecting that taxes will rise on investment income, with the White House proposing that for households earning over $250,000 the rate on dividends rise to a peak of 39.6 percent from the current 15 percent, and the rate on capital gains increasing to 20 percent from 15 percent.

Wealthy households will face an additional 3.8 percent charge on most investment income to help pay for the recent health care legislation.

Neil J. Hennessy, the founder of Hennessy Funds, said at a year-end investing event last week that if politicians allow the rates to rise as much as the White House has proposed, dividends will become much less attractive and there could have a “disastrous effect” on the willingness of investors to put money into stocks.

Some companies have already acted ahead of the changes, with Costco and Las Vegas Sands leading the way in issuing special dividends before the end of the year so their shareholders can take advantage of current tax rates. Some investors have sold off stocks that issue regular dividends expecting the companies to become less valuable once a greater proportion of dividend income is lost to taxes.

Andrew Garthwaite, an analyst at Credit Suisse, has predicted that if the White House’s view on investment taxes prevails, it could lead to a long-term reduction in the value of the Standard Poor’s 500-stock index of as much as 5 percent. Mr. Garthwaite cautioned that the figure is likely to be lower, and that investors have already incorporated some of those losses into the market by selling stocks.

Mr. Kass disputed Mr. Garthwaite’s estimates in a note to clients, and said he was looking at market losses of at most 1.6 percent and more likely closer to 0.8 percent. Part of the disagreement arises from Mr. Kass’s contention that many people who are subject to tax are either uninformed about tax law — and unlikely to respond to changes — or more focused on the long-term performance of their portfolio than on short-term tax payments.

Mr. Kass said that even the losses he has predicted assume that wealthy people will be willing to cash out of their stock positions and stay out, something that he said is unlikely given the small returns available in other financial investments.

But an even larger source of misunderstanding has come from the difficulty of ascertaining the amount of all United States stocks held by people who will have to pay the new, higher tax rates. Foreign investors controlled 12.4 percent of American stocks in 2011, up from 8.8 percent in 2004, Treasury Department data shows.

Among the stocks that are held in the United States, 48 percent are held directly by households, down from 65 percent in 1988, according to Federal Reserve figures. And 40.7 percent of households have mutual funds in tax-exempt accounts.

But only some of these have income over $250,000 a year, and a portion of those people have their money in accounts protected from taxes. Eric Toder, a co-director of the Tax Policy Center, said as a result market prices should have little to do with the taxes paid on gains because prices are largely “being determined by tax-exempt investors and by foreign investors.”

Article source: http://www.nytimes.com/2012/12/03/business/some-economists-doubt-dire-effects-from-tax-increases.html?partner=rss&emc=rss

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News Analysis: A Bailout by Any Other Name

November 28, 2012 by Leave a Comment

That is the cautionary lesson from the latest revamping of Greece’s financial rescue deal, according to some economists. And they warn that unless Europe starts enforcing its own stated rules against bailouts and big budget deficits, governments will never get serious about putting their financial houses in order.

Of course, none of the finance ministers who worked out the new financial terms for Greece in Brussels called it a bailout. But for critics it was precisely that. By reducing interest rates and extending the payback maturities on the €168 billion, or $217 billion, that European governments have lent Greece so far, those loans will now become barely profitable for the countries that made them.

As such, it is the sixth bailout since the European debt crisis exploded in 2009 — three for Greece and one each for Ireland, Portugal and Spain. And these rescues have occurred despite the fact that the treaty underpinning Europe’s common currency project bars bailouts by forbidding one member country from assuming the debts of another.

But if the majority of euro zone countries did not consistently flout another treaty principle — the one limiting a member government’s debt to 60 percent of gross domestic product — there would not be a euro zone debt crisis in the first place. Greece might be the most glaring violator, but Germany and France are also breaking that rule.

Although it buys time for Greece, the latest debt deal has been widely criticized for being overly optimistic in expecting Greece to produce the growth and fiscal discipline needed to bring its debt down from the level of 195 percent of G.D.P. today to below 120 percent after 2020.

Skeptics cite Germany’s demand that Greece impose another round of spending cuts in return for this latest dispensation as further proof that the architects of monetary union have decided that the last best hope for the euro’s survival is to continue subscribing to the principle that punishments and threats from Brussels will keep spendthrift nations from falling into hock.

But some economists contend that as long as countries in trouble continue to accept that they will get bailed out when they run out of money, there will be scant incentive for them to accede to the demands of the euro zone’s stability and growth pact, which requires countries to keep their debts and deficits at reasonable levels.

“There is an acknowledgment in Brussels and Berlin that the stability pact has not worked because it was not strong enough — so now they have tried to make it tougher by imposing more punishments,” said Charles Wyplosz, an international economist at the Graduate Institute in Geneva who contends that latest Greek debt deal is nothing more than another bailout. “But what they don’t realize is that this will not work as long as local parliaments remain sovereign.”

In a recent paper, Mr. Wyplosz argues that the only way sovereign states will become fiscally responsible over the long run is when they truly grasp that Brussels will abide by the founding treaty’s prohibition against country’s bailing out one another.

He points to the United States as an example.

With dozens of states that manage their own fiscal affairs, yet operate comfortably within a federal system, the common currency system in the United States has long been seen as a model by those who seek improvements in euro zone policy.

At the root of this success, say proponents of the U.S. model, is the fact that despite there being no law or constitutional provision against the federal government’s bailing out bankrupt states, in the past 150 years there has not been a single case in which Washington has had to rescue a penniless state.

And the last time a state went belly up was in 1933, when Arkansas stopped paying investors who held its highway bonds.

To be sure, as the economist C. Randall Henning, an expert on the topic, has described in detail, in the early years of the United States, the federal government presided over numerous bailouts — until Congress said no more in the mid-1840s.

For better or worse, American states got the message and the majority of them have adopted various legal statutes that require them to balance their budgets each year.

Article source: http://www.nytimes.com/2012/11/29/business/global/a-bailout-by-any-other-name.html?partner=rss&emc=rss

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Economix Blog: Household Income Stagnates, Again

November 27, 2012 by Leave a Comment

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Inflation-adjusted median annual household income was more or less flat in October, stuck at $51,378.

That figure comes from Sentier Research’s analysis of the government’s Current Population Survey data, which is charted below. Gray areas indicate periods of official recession (which economists define as when the economy is actively shrinking, as opposed to growing).

Source: Sentier Research. Gray areas indicate period of economic contraction. Source: Sentier Research. Gray areas indicate period of economic contraction.

Annual median household income has been circling around the $51,000 mark for about two years, even though the recession officially ended more than three years ago. In fact, October’s median household income measure was 4.7 percent lower than its counterpart of $53,937 in June 2009, the official end of the Great Recession. Labor market measures usually trail other economic indicators (like manufacturing orders or some other categories of business spending), but measures of the job market and workers’ incomes have been particularly atrocious in this recovery.

As you can see in the chart, incomes were relatively stagnant during the last expansion, too, indicating that flat living standards may have deeper causes than just the most recent business cycle.

Article source: http://economix.blogs.nytimes.com/2012/11/26/household-income-stagnates-again/?partner=rss&emc=rss

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U.S. Trade Deficit Narrows as Exports Climb

November 12, 2012 by Leave a Comment

Other data released on Thursday showed a drop in new claims for unemployment benefits last week, although a storm that battered the East Coast distorted the figures.

The trade deficit shrank 5.1 percent to $41.55 billion, the smallest shortfall since December 2010, the Commerce Department said. Economists had expected it to widen to $45 billion.

Exports jumped 3.1 percent, the biggest increase in over a year. The gain more than offset a 1.5 percent increase in imports that was centered on purchases of consumer goods.

The report provides the latest positive sign for the American economy, which has appeared to pick up as consumers spend more freely and home construction quickens.

“This was a very encouraging report as the improvement in both export and nonpetroleum import activity suggest improving demand both domestically and globally,” said Millan Mulraine, an economist at TD Securities.

Chinese demand for American products appeared to help exporters in September. China bought $8.8 billion in American goods and services, up 0.3 percent from a month earlier, although those figures were not seasonally adjusted.

Exports to the European Union, where a debt crisis has pushed several countries into recession, were flat. The government does not seasonally adjust figures for countries and regions as it does for overall imports and exports.

The larger-than-anticipated decline in the trade gap suggests that American economic growth may have been higher in the third quarter than the 2.0 percent annual rate initially reported.

Like the gain in exports, the rise in imports provided a positive signal for domestic demand, even though imports subtract from economic growth. Imports of consumer goods rose by $2.7 billion.

Analysts said a good deal of the increase reflected imports of Apple’s iPhone 5. That suggested the increase might be temporary.

A separate report showed the number of Americans filing new claims for unemployment benefits fell last week, although Hurricane Sandy made the data difficult to interpret.

Initial claims for state jobless benefits dropped 8,000 to a seasonally adjusted 355,000, the Labor Department said. That was below the median forecast of 370,000 in a Reuters poll of economists.

An analyst from the Labor Department said that the storm, which slammed into the Eastern seaboard on Oct. 29, increased unemployment claims in some states by leaving people out of work, but that it also reduced claims in at least one state because power failures kept it from collecting claim reports.

The four-week moving average for jobless claims, which smooths out volatility, rose 3,250 to 370,500. Economists think readings below 400,000 generally point to rising employment.

Article source: http://www.nytimes.com/2012/11/09/business/economy/us-trade-deficit-narrows-as-exports-climb.html?partner=rss&emc=rss

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Today’s Economist: Casey B. Mulligan: The Baby Boom and Economic Recovery

October 11, 2012 by Leave a Comment

DESCRIPTION

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

Thanks in part to the baby boom, the employment-population ratio understates the amount that the economy has recovered.

Today’s Economist

Perspectives from expert contributors.

Before the recession began, 63 of every 100 people age 16 and over were employed. The percentage plummeted to 58.4 by the fourth quarter of 2009 and hasn’t moved far from there since.

A variety of economists have used the ratio and its dynamics to indicate that the economy has hardly recovered. Some say the employment-population ratio’s lack of recovery is because of insufficient government spending; others suggest that it might reflect policy failures of the Obama administration.

But the employment-population ratio is influenced by important factors beyond the control of the president. One of them is the aging of the baby boomers. The employment-population ratio was expected to fall as baby boomers reached retirement ages between 2008 and 2015, even without a recession. For this reason alone, a full recovery would mean an employment-population percentage of about 61.

Although much attention last week was given to the August-to-September increase in part-time employment, the average hours worked among private-sector employees have increased sharply since 2009 and are now about the same as they were before the recession began.

The chart below shows a recovery when the quantity of labor is measured in terms of hours worked per capita (gray) or age-adjusted hours worked per capita (red). Both indexes are set to 100 in December 2007; the age adjustment is taken from my book on the labor market since 2007.

The red series hits bottom at 90.8 and now stands at 94.4. Unlike the employment-population ratio’s negligible recovery, the age-adjusted hours series has recovered about 40 percent — four points — in three years.

To be sure, an additional six points of the recovery still remain, and the labor market continues to be depressed by public policies enacted over the last four to eight years. But some of these policies, such as mortgage assistance, the three increases in the federal minimum wage and the federal rules giving states more flexibility to expand food-stamp participation were begun before President Obama took office and probably would not have been overturned if John McCain had won the 2008 election. Some of those policies had broad political support.

Thanks to demographic and political changes, a full labor market recovery may be beyond any president’s reach.

Article source: http://economix.blogs.nytimes.com/2012/10/10/the-baby-boom-and-economic-recovery/?partner=rss&emc=rss

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Manufacturing and Construction Lift Outlook on Economy

January 3, 2012 by Leave a Comment

The Institute for Supply Management, a trade group of purchasing managers, said on Tuesday that its manufacturing index rose to 53.9 in December from 52.7 in November. Readings above 50 indicate expansion.

Also on Tuesday, the Commerce Department reported that spending on construction projects rose 1.2 percent in November, following a revised 0.2 percent drop in October. The increase was the third in four months and the largest since a 2.2 percent rise in August.

The November increase pushed spending to a seasonally adjusted annual rate of $807.1 billion, still barely half the $1.5 trillion that economists consider healthy. Analysts say it could be four years before construction returns to healthy levels.

United States manufacturing has expanded for more than two years. Factories were one of the first areas of the economy to start growing after the recession officially ended in June 2009.

The latest survey from the Institute for Supply Management showed that domestic factories should start the year strongly. Factories hired last month at the fastest pace since June, the survey found. A measure of new orders rose, a good sign for future output. And exports also increased last month, though it was not clear how long that would last. The economy in Europe is faltering as the Continent continues to address its debt crisis.

Consumers are gaining confidence and are spending more. Some economists were forecastiong that car sales increased in December after a strong month of sales in November. That should improve output among automakers and also steel companies, tire makers and others that supply the industry.

Orders for long-lasting manufacturing goods jumped in November, the Commerce Department said last month. Most of that increase reflected a huge rise in commercial aircraft orders, a volatile category.

Still, demand for core capital goods, which are often a proxy for business investment plans, fell for the second straight month. Business spending was a crucial driver of economic growth in 2011. If businesses trim spending, economic growth is likely to slow.

Businesses are less likely to retreat, however, if the economy continues to improve.

For construction in November, strength was seen in housing and government spending. Nonresidential construction fell, reflecting declines in construction of office buildings and shopping centers.

The industry was hit hard by the housing bust and has had trouble recovering. But home construction has begun a gradual rebound and should add to the nation’s economic growth. The chief reason is that apartments are being built almost twice as fast as two years ago. Renting is often the only option for many people who have lost their jobs, their homes or both.

Builders in November broke ground on homes at a seasonally adjusted annual rate of 685,000. That was a 9.3 percent jump from October and the fastest pace since April 2010.

Builders should start at least 600,000 homes this year. That is up from 587,000 last year and 554,000 in 2009 — the worst year on record — but it is half the number that economists expect in a healthy market.

Even so, the recovery appears to be strengthening, if fitfully. Last week, the Conference Board said its consumer confidence index rose in December to the highest level since April. That is important because consumer spending accounts for about 70 percent of the economy.

Article source: http://feeds.nytimes.com/click.phdo?i=5be676a11ab1b46dec75fe3e003bb3a0

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Jobless Claims Rise Slightly For the Week

December 30, 2011 by Leave a Comment

Meanwhile, an index of signed contracts for home purchases in November rose 7.3 percent, to 100.1 points, the highest level in a year and a half, according to a report Thursday from the National Association of Realtors.

A reading of 100 points is considered healthy, but more buyers are canceling their contracts at the last minute, making that benchmark less reliable.

And separately, the Institute for Supply Management-Chicago reported Thursday that its business barometer was nearly the same in December, at 62.5, as the seven-month high of 62.6 it hit in November. The report said prices paid rebounded and order backlogs expanded. A reading of above 50 indicates that the economy is growing, while under 50 is a sign that it is contracting.

Weekly applications for jobless benefits increased by 15,000, to a seasonally adjusted 381,000, after three weeks of declines, the Labor Department said.

Still, the four-week average, a less volatile measure, dropped for the fourth consecutive week, to 375,000. That is the lowest level since June 2008.

Applications generally need to fall consistently below 375,000 to signal that hiring is strong enough to reduce the unemployment rate.

While layoffs have fallen sharply since the recession ended, many companies have been slow to add jobs. Employers have added an average of 143,000 net jobs a month from September through November, almost double the average for the previous three months.

Next year is expected to be even better. A survey of 36 economists by The Associated Press this month found that they predicted the economy would generate an average of about 175,000 jobs a month in 2012.

More small businesses plan to hire than at any time in three years, a trade group said this month. And a separate survey found that more companies planned to add workers in the first quarter of next year than at any time since 2008.

In November, the unemployment rate fell to 8.6 percent from 9 percent. About half of that decline was the result of many unemployed giving up their search for work.

Article source: http://feeds.nytimes.com/click.phdo?i=0cbcf1e578b78adac997fd14e7796d95

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