Good news on Jobs

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U.S. Job Gains Strongest in Seven Months

http://cnn.netscape.cnn.com/ns/news...9130002844293&dt=20041105091300&w=RTR&coview=


WASHINGTON (Reuters) - New U.S. jobs soared at the sharpest rate in seven months in October, the government reported on Friday, helped by a surge in construction activity as hurricane-battered areas in the Southeast were rebuilt.

A surprisingly strong 337,000 jobs were added to payrolls last month -- twice the 169,000-job growth that Wall Street economists had forecast and the strongest since March when 353,000 jobs were created, the Labor Department said.

Still, the unemployment rate edged up to 5.5 percent from 5.4 percent in September, but that was because more people joined the search for employment, a potentially hopeful sign.

Not only was October a strong month but the number of jobs created in the two prior months was revised up -- to 139,000 in September instead of 96,000 and to 198,000 in August instead of 128,000.

The dollar, which has been under pressure, strengthened broadly on the news while bond prices weakened in the expectation that a resurgent labor market may foster higher interest rates and that investors may favor stocks.

"It looks like the job situation is improving and that this will support consumer spending going into the holidays and offset some of the drag caused by high oil prices this year," said economist Gary Thayer of A.G. Edwards & Sons Inc. in St, Louis, Missouri.

The resurgent labor market data come days before Federal Reserve policy-makers, meeting Wednesday, are expected to nudge official short-term interest rates up for a fourth time this year, by a quarter percentage point, to lift the federal funds rate to 2 percent.

Analysts said it might mean that the U.S. central bank was less likely to halt its current rate-rising cycle after next week, as many had speculated before the jobs data, though it was too early to conclude that another hike was likely at this year's final policy-setting meeting in December.

"It should empower the Fed to clearly do something next week and probably raises the odds that they will do something in December," said Robert MacIntosh, chief economist with Eaton Vance Management in Boston.

Kathleen Utgoff, commissioner of the Bureau of Labor Statistics, noted that 71,000 new construction jobs -- the biggest since March 2000 -- "reflected rebuilding and cleanup activity in the Southeast following the four hurricanes that struck the U.S. in August and September."

Florida and other southeastern states were hit by severe storms that inflicted heavy damage to homes and businesses.

 

[-Cp]

http://apnews.myway.com/article/20041105/D865QFQ00.html



WASHINGTON (AP) - Employers aggressively hired new workers in October, adding 337,000 people to their payrolls after a sluggish summer, but the unemployment rate rose fractionally to 5.5 percent.

The pace of hiring was the fastest in seven months, nearly double what economists had forecast, the Labor Department reported Friday, saying cleanup efforts from hurricanes that struck Florida and much of the Southeast helped jump-start the labor market.

But the overall, seasonally adjusted jobless rate actually rose by 0.1 percentage point from the 5.4 percent rate of September because more people renewed their job searches, expanding the pool of available workers.

Economists were elated by the surge in payrolls. "It's now looking like that soft spot is clearly over," David Wyss, chief economist at Standard & Poor's, said of the recent slowdown.

The hurricanes clearly had an impact and 300,000-plus payroll increases aren't sustainable in the coming months, Wyss said. But monthly increases of 200,000 are realistic through the end of the year, he said.

Amid a rally on Wall Street, investors enthusiastically greeted the jobs numbers. In early trading, the Dow Jones industrial average rose 52 points. The Nasdaq gained 16 points.

The jobs report was good news for President Bush as he prepares for a second term. A generally weak job market plagued his re-election campaign, offering a political target to his Democratic challenger, John Kerry. The administration quickly took credit.

"There can be no doubt that President Bush's tax relief, combined with good monetary policy, the strength of our small business sector and our outstanding work force, has led to a growing economy that is producing good jobs for American families," said Treasury Secretary John Snow.

Economists had expected October payrolls to grow by about 175,000 with the jobless rate holding steady at 5.4 percent. Employers have added about 2.2 million jobs since August 2003.

Hiring in construction helped spur last month's job growth, with employment in that sector rising by a net 71,000 jobs.

"Some of this unusually large gain reflected rebuilding and cleanup activity in the Southeast following the four hurricanes that struck the U.S. in August and September," said Kathleen Utgoff, commissioner of the Bureau of Labor Statistics.

In the past year, construction employment has grown by about 16,000 per month.

New jobs in professional and business services also helped strengthen overall job growth last month, with hiring expanding by 97,000. Temporary employment services were responsible for about half of that, giving ammunition to Bush critics who argue that much of the recent job growth is occurring in lower-paying work that typically doesn't offer heath insurance and other benefits.

October's job growth was the highest since March, when employers added 353,000 positions. Since that time, the pace had slowed, especially in June and July. But hiring has picked up since, growing by a revised 198,000 in August and 139,000 in September. Both figures were higher than originally reported by the Labor Department.

Manufacturing was the only major sector to lose jobs last month, with employment falling by a net 5,000. That followed a decline of 14,000 in September.

Some of the report showed the jobs market, while clearly on the upswing, still bumpy. The number of people who held more than one job rose by 519,000 to 8 million. The average time for the unemployed to find a job was 19.6 weeks, the same as in September.

The jobless rate for blacks jumped to 10.7 percent last month, up from 10.3 percent in September. The rate for Hispanics fell to 6.7 percent from 7.1 percent from the previous month, while the rate for teenagers grew to 17.2 percent from 16.6 percent. The rate for whites held at 4.7 percent.

But the economy is back on track, growing at a 3.7 percent annual rate in the third quarter, up from a 3.3 percent pace in the prior period.

Analysts think Federal Reserve policy-makers will continue to move rates from extraordinarily low levels to more normal levels to make sure inflation doesn't become a threat to the economy down the road.

"Raising rates next week is a foregone conclusion," Wyss said.

The Fed is expected to boost short-term interest rates for a fourth time this year when it meets next week, pushing up a key rate from 1.75 percent to 2 percent.

 

[Avatar4321]

Kinda funny. if this trend keeps up, which it probably will since we are coming into the holiday season, then the Democrat argument of the net job loss has just fallen apart. I bet this hurts them so much, but they are probably so into themselves they dont notice it.

 

[freeandfun1]

Remember the billboards in Florida that blamed Bush for the hurricanes? Now the dems are saying the job increase is ONLY because of the hurricanes. Well, which is it? I guess Bush created the hurricanes to create jobs?

 

[KarlMarx]

Remember the billboards in Florida that blamed Bush for the hurricanes? Now the dems are saying the job increase is ONLY because of the hurricanes. Well, which is it? I guess Bush created the hurricanes to create jobs?

There also was a slowing down of the rate of growth in productivity recently. That helped increase the demand for jobs, as well. Whenever productivity increases, there is less of a need to hire new workers, since current workers can produce more.

One of the reasons that job growth was so slow over the past few years was the productivity kept growing at a very high rate. This was partly due to technology. Increasing productivity is good in the long run, since it helps to keep costs down and businesses competitive. In the short term, however, large increases in productivity keep a lid on job growth. Fortunately, the rate at which productivity was increasing was not sustainable and now we may see the benefits (i.e. increased job growth, increased competititiveness for businesses, low inflation)

 

[nakedemperor]

Kinda funny. if this trend keeps up, which it probably will since we are coming into the holiday season, then the Democrat argument of the net job loss has just fallen apart. I bet this hurts them so much, but they are probably so into themselves they dont notice it.

These new hirings certainly are good news, but a very large portion of them are DUE to the holiday season coming up. And...why would this hurt Democrats so much? Everyone wants to see jobs created.. this is good news for everyone. Oh, you must mean bad in terms of the Democratic platform of job loss in the upcoming elec-- wait, those already happened. Bad how? Not bad. Only good. Good for everything. Cynical cheap parting shops = bad.