November Jobs Report – November’s employment report is expected to show improvement over last month but still portray a very weak market for jobs.
Economists have been forecasting a total 125,000 non-farm payrolls were added in November, but that number could disappoint markets that are geared up for a slightly better number.
The economists forecast that the private sector added a total 150,000 jobs in November, which were offset by layoffs in the public sector. The unemployment rate is expected to hold steady at 9 percent, when the report is released at 8:30 a.m. EST Friday.
“We’ve become somewhat biased for a stronger-than-expected number,” said David Ader, head of Treasury strategy at CRT Capital. “Whisper numbers are 150,000, 175,000” for private payrolls, slightly better than the consensus. In October, a total 80,000 payrolls were added, with private sector jobs at 104,000.
One bright spot in November may have been hirings by new businesses, but that is not likely to be reflected in the employment report since the government data is slow to reflect them, according to Mesirow Financial chief economist Diane Swonk. Wednesday’s private sector employment report from ADP showed a surprising increase of 110,000 new small business hires.
Swonk said these types of jobs typically show up later in revisions to the government data. She expects to see a total 140,000 non farm payrolls, with 160,000 hires in the private sector.
“It does look like we’re getting an increase in small business births…over half of the increase in the ADP data is small businesses. Usually, when you have that kind of a pickup, it’s indicative of small businesses starting,” she said.
Swonk said existing small businesses remain pessimistic, and it is doubtful they are doing much hiring. But another encouraging sign is the increase in initial public offerings because young companies are more inclined to add workers.
“It bothers me that mergers and acquisitions are so strong because that’s people hunkering down rather than expanding. The merger activity we’ve seen is more defensive,” she said. “There are a lot of cross currents.”