Posted on: Saturday, December 4, 2004
Income, new job growth sluggish
By Nell Henderson
Washington Post
WASHINGTON — U.S. job growth slowed sharply last month, and many workers' incomes fell as automakers, airlines and retailers trimmed their payrolls just as the holiday season was beginning, the Labor Department reported yesterday.
Employers added 112,000 jobs in November, about a third as many as they did the previous month, and below the roughly 150,000 per month that economists believe is needed to keep up with population growth. The department also shaved 54,000 jobs off its earlier estimates of October and September gains to non-farm payrolls.
The unemployment rate fell to 5.4 percent from 5.5 percent and has been at either of those two levels every month since July.
Workers' hours also fell, which pushed down average weekly wages by $1.25 to $533.47 for most workers on private payrolls.
The earnings figures help "explain the weak start to holiday retail sales," Stuart G. Hoffman, chief economist at PNC Financial Services Group, wrote in an analysis.
The labor report came a day after the nation's major retail chains reported disappointing results for November. Sales at stores open for more than a year rose just 1.7 percent last month, compared with a 3.7 percent gain in 2003, according to the International Council of Shopping Centers. Several companies reported falling sales, including Gap Inc., Federated Department Stores, which owns Bloomingdale's and Macy's, and May Department Stores, which owns Hecht's, Lord & Taylor and Filene's.
Several big chains have announced they will use deeper discounts and bigger promotions to try to win the business of the lower-income shoppers that have been hardest hit by recent increases in food and energy prices.
"The recent job picture indicates that the holiday shopping season will be a decent, not spectacular one," wrote Sung Won Sohn, chief economic officer for Wells Fargo Economics.
The job numbers did not change widespread expectations that the Federal Reserve will raise short-term interest rates for a fifth time this year when policy-makers meet Dec. 14, and continue moving it up gradually in the year ahead to keep inflation contained.
The November job gain was the smallest since July. It contrasted sharply with an October burst of hiring that partly reflected the effects of the four hurricanes that struck the southeast section of the country in August and September.
Construction and temporary jobs surged in October, as companies across the country provided labor and materials for the clean-up and reconstruction efforts. Both job categories rose by much less in November. All the figures are adjusted for seasonal variation.
Total U.S. job gains have averaged 178,000 a month since September, but some economists expect that rate to fall in coming months as the boost from the hurricanes fades and as economic growth cools slightly.
"The bottom line is payroll job growth is anemic," said Richard Yamarone, director of economic research at Argus Research Corp. "Economic growth is moderating and businesses don't need to pick up the pace of hiring."
