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| In this Wednesday, Dec. 12 2012 photo a job seeker leaves his contact information with a potential employer during a job fair in New York. More Americans sought unemployment benefits in the last week of 2012, though the winter holidays likely distorted the data for the second straight week. |
WASHINGTON (AP) -- The U.S. job market showed resilience in three reports Thursday, suggesting it may able to withstand a federal budget battle that threatens more economic uncertainty in coming months.
A
survey showed private hiring increased last month, while layoffs
declined and applications for unemployment benefits stayed near a
four-year low. The data led some economists to raise their forecasts for
December job growth one day before the government releases its closely
watched employment report.
"The job market
held firm in December despite the intensifying fiscal cliff
negotiations," said Mark Zandi, chief economist at Moody's Analytics.
"Businesses even became somewhat more aggressive in their hiring at year
end."
The most encouraging sign came from
payroll provider ADP. Its monthly employment survey showed businesses
added 215,000 jobs last month, the most in 10 months and much higher
than November's total of 148,000.
Economists
tend to approach the ADP survey with some skepticism because it has
diverged sharply at times from the government's job figures. The Labor
Department releases its employment report Friday.
But some economists were also hopeful after seeing businesses were less inclined to cut jobs last month.
Outplacement
firm Challenger, Gray & Christmas said that the number of announced
job cuts fell 43 percent in December from November, and overall planned
layoffs in 2012 fell to the lowest level since 1997.
The
decline in layoffs coincided with a drop last month in the number of
people who applied for unemployment benefits. The four-week average was
little changed at 360,000 last week. That's only slightly above the
previous week's 359,750, which was the lowest since March 2008.
Most
economists expect the Labor Department report will show employers added
about 150,000 jobs last month and the unemployment rate stayed at 7.7
percent.
Some economists saw potential for stronger gains after seeing Thursday's data.
Joseph
LaVorgna, chief U.S. economist at Deutsche Bank, raised his forecast
for job growth in December to 190,000 jobs, up from 150,000.
Credit Suisse increased its forecast to 185,000, up from 165,000.
"Given
that we have restraints, the labor market data do appear to be
improving," said Dana Saporta, an economist at Credit Suisse.
Still,
many economists remained cautious about where the job market is headed.
While Congress and the White House reached a deal this week that
removed the threat of tax increases to most Americans, they postponed
the more difficult decisions on cutting spending. And the government
must also increase its $16.4 trillion borrowing limit by late February
or risk defaulting on its debt.
Congressional
Republicans are pressing for deep spending cuts in return for any
increase in the borrowing limit. President Barack Obama has repeatedly
said wants the issues kept separate.
The
economy has added about 150,000 jobs a month, on average, over the past
two years. That's too few to rapidly lower the unemployment rate.
Hiring
probably won't rise above the current 150,000 per month trend until
after the borrowing limit is resolved, economists say.
A
similar fight over raising the borrowing limit in 2011 was only settled
at the last hour and nearly brought the nation to the brink of default.
"That's
not an environment where you're likely to be taking risks," such as
boosting hiring, said Nigel Gault, chief U.S. economist at IHS Global
Insight.
Even with modest gains in hiring, the
unemployment rate remains high. It fell to 7.7 percent in November from
7.9 percent in October. But that was mostly because many of the
unemployed stopped looking for jobs. The government counts people as
unemployed only if they are actively searching for work.
The
number of people receiving jobless benefits fell to 5.4 million in the
week ended Dec. 15, the latest data available. That's down about 70,000
from the previous week. The figure includes about 2.1 million people
receiving emergency benefits paid for by the federal government. The
White House and Congress agreed earlier this week to extend that program
for another year.
There are signs the economy
is improving. The once-battered housing market is recovering, which
should lead to more construction jobs this year. Companies ordered more
long-lasting manufactured goods in November, a sign they are investing
more in equipment and software. And Americans spent more in November.
Consumer spending drives nearly 70 percent of economic growth.
