Employment probably rose for a third month in December, bringing United States payroll growth last year to about 1 million and pointing to further improvement in the labour market in 2011, economists said before a report this week.
A projected 140,000 gain in December payrolls is the median forecast of 61 economists surveyed by Bloomberg News before the January 7 report from the Labor Department. The unemployment rate may have eased to 9.7 per cent from 9.8 per cent. Other reports may show faster growth at the nation’s factories and service industries last month.
Bigger employment and income gains may help boost sales at companies like Bed Bath & Beyond, allowing the expansion to become well-rooted. Even with the labour market improvement in 2010, it will take years to make up for the 8.4 million jobs lost during the 18-month recession that ended in June 2009.
“Things are improving but it’s a gradual momentum that’s building,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research in New York. “It all comes back to the labour market and so far the jobs recovery has been disappointing.”
Estimates for the increase in December payrolls ranged from 95,000 to 215,000 after a 39,000 rise a month earlier and a 172,000 gain in October.
Private payrolls, which exclude government agencies, rose by 155,000 last month after a 50,000 November gain, the survey showed. Including the projected increase for December, companies added about 1.3 million workers last year, the most since 2006.
Indications the economy is improving and will create the conditions for further employment growth helped fuel gains in the stock market last year at the same time companies reported stronger earnings.
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The Standard & Poor’s 500 Index rose 13 per cent in 2010 after a 23 per cent jump in 2009, making it the biggest two-year advance since the internet-bubble rally of 1998 and 1999.
Even with the pickup in hiring, the jobless rate has shown few signs of declining. December is forecast to be the 17th month in which unemployment has been 9.5 per cent or higher. For all of 2010, joblessness likely averaged 9.7 per cent, the worst year since 1982.
States and municipalities with growing budget gaps are cutting spending and reducing headcount. Florida may cut 5 per cent of its state workforce to save costs.