WASHINGTON – The U.S. economy added 146,000 jobs in November and the unemployment rate fell to 7.7 per cent, the lowest since December 2008. The government said Superstorm Sandy had only a minimal effect on the figures.
The Labor Department’s report Friday offered a mixed picture of the economy.
Hiring remained steady during the storm and in the face of looming tax increases. But the government said employers added 49,000 fewer jobs in October and September than it initially estimated.
And the unemployment rate fell to a four-year low in November from 7.9 per cent in October mostly because more people stopped looking for work and weren’t counted as unemployed.
The report “is something of a mixed bag but, on balance, it’s a positive,” said Paul Ashworth, an economist at Capital Economics.
Sandy’s effect on the figures was much smaller many analysts had predicted. The government noted that as long as employees worked at least one day during a pay period — two weeks for most people — its survey would have counted them as employed.
Still, there were signs that the storm disrupted economic activity. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work — the most for any month in nearly two years. These workers were still counted as employed.
Stock futures jumped after the report. Dow Jones industrial average futures were down 20 points in the minutes before the report came out at 8:30 a.m., and just afterward were up 70 points.
As money shifted into stocks, it moved out of safer bonds. The yield on the benchmark 10-year U.S. Treasury note, which moves opposite the price, rose to 1.63 per cent from 1.58 per cent just before the report was released.
Since July, the economy has added an average of 158,000 jobs a month. That’s a modest pickup from 146,000 average in the first six months of the year.
The job growth suggests that most employers aren’t yet delaying hiring because of the “fiscal cliff.” That’s the combination of sharp tax increases and spending cuts set to take effect next year unless the White House and Congress reach a budget deal before then.
There is “no obvious impact from the looming fiscal cliff yet,” Ashworth added, “but it could still have a greater effect on December’s figures.”
Last month, retailers added 53,000 positions. Temporary help companies added 18,000 and education and health care also gained 18,000.
Auto manufacturers added nearly 10,000 jobs.
Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess.
Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the Northeast.
The U.S. grew at a solid 2.7 per cent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 per cent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. That’s not enough growth to lower the unemployment rate.
The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October and work interruptions caused by Sandy reduced wages and salaries that month by about $18 billion at an annual rate, the government said.
Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.