Employers Pulled Back on Hiring in Nov.
By Fred Barbash
Washington Post Staff Writer
Friday, December 3, 2004; 9:57 AM
U.S. hiring slowed significantly last month, the Labor Department reported today, dampening an economic outlook already clouded by lagging pre-holiday shopping by wary consumers.
The November figure of 112,000 new jobs was well below forecasts for the month of 180,000 to 200,000 and not enough to keep up with population growth or to even approach the growth in October. In fact, the department revised downward the robust employment figures for October, cutting the job increase number to 303,000 from 337,000.
Meanwhile, the unemployment rate in November declined slightly from 5.5 percent to 5.4 percent.
The disappointing news came on top of bleak November retail sales figures released Thursday. Sales at stores open for more than a year rose 1.7 percent, compared with a 3.7 percent gain in 2003, the International Council of Shopping Centers reported.
The Labor Department report showed a significant decline in retail employment. It also suggested that spending might slow further since there was an increase in hourly wages of a mere penny over the previous month at a time when heating and gasoline costs have been shooting skyward.
"Americans won't have a lot to spend in the holiday season," Avery Shenfeld, senior economist at CIBC World Markets Inc., told the Bloomberg News Service.
"While job growth is slower than everyone thought before today," said Stephen Stanley, chief economist for RBS Greenwich Capital, "it is still healthy with a 178,000 average in the past 3 months, and there have been plentiful anecdotal indications that we should see further acceleration in 2005."
In a note to clients, Stanley noted that payrolls are "incredibly volatile from month to month," but that the average growth is still sufficient to absorb slack in labor markets and thus to keep the Federal Reserve on course to continue raising interest rates.
"It's not great job growth, but it's decent," Joel Naroff, president of Naroff Economic Advisors, told the Associated Press. "It is decent enough to create income and spending," which will keep the economy chugging.
White House press secretary Scott McClellan said, "The fact is that jobs have been created for 15 straight months. There was stronger than expected growth in October. The economy is continuing to grow stronger with more than 2 million jobs created this year. The president's economic policies are working."
The fastest job growth came in health care and hospitality, with the most notable increase in hospitals, nursing homes and physicians' offices.
Professional and technical services added 16,000 jobs during the month, the report said, with employment rising in computer and related services (10,000) and in architectural and engineering services.
Manufacturing employment was flat.
