New jobs reports bode well for hiring in 2012
Jobless claims have hit a low not seen since 2008. These job hunters were lined up this past month for a National Career Fairs event in Manhattan. (Dec. 12, 2011) Credit: AP
The U.S. jobs recovery gathered pace as a measure of private-sector hiring surged in December and claims for unemployment benefits fell to the lowest rate since June 2008, suggesting the battered labor market may continue to strengthen in 2012.
The ADP National Employment Report's December job tally of 325,000 surprised economists who had expected a gain of roughly half that size. It was also above the 204,000 private jobs added in November.
Many economists struck a note of caution, though, saying the number may have been distorted by seasonal factors. Joel Prakken, of Macroeconomic Advisers, which helps produce the survey, told reporters that job readings tend to be inflated at year-end as employers keep workers on payrolls for accounting reasons, and the reading could be revised lower.
"Certainly we're getting some more encouraging news on the jobs market, but we have to be very aware that it does reflect a very volatile period of the year -- the holiday season and the days following the new year," said Bernard Baumohl, chief global economist at Economic Outlook Group in Princeton, N.J.
Markets did indeed appear to take the data with a grain of salt. U.S. stock indexes were lower while safe-haven U.S. government bond prices edged up, keeping the benchmark 10-year yield below 2 percent.
In December 2010, a surge in private sector hiring far exceeded the total monthly job gain reported by the government.
The more comprehensive government payrolls monthly report, due Friday, is expected to show the economy added 150,000 public and private sector jobs in December, according to a Reuters survey conducted earlier this week.
Even so, data on Thursday confirmed some encouraging trends.
The Labor Department reported the number of Americans filing first-time claims for unemployment benefits fell by 15,000 last week, the fourth decline in the last five weeks.
The four-week moving average, considered a better measure of trends, fell to its lowest level since June 2008.
"The message from the four-week averages is that the labor market is maintaining its recent improvement," said Gennadiy Goldberg, interest rate strategist at 4-Cast, Inc in New York.
There were also signs of improvement in hiring within the vast U.S. services sector.
