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Jobs Picture Brightens in Nation, Kansas City, Mo., Area

Posted on: Friday, 2 December 2005, 21:00 CST

By Diane Stafford, The Kansas City Star, Mo.

Dec. 3--U.S. employers added 215,000 nonfarm payroll jobs in November, far outpacing the nation's average monthly jobs growth of 92,000 over the last three months.

Labor market analysts said the gain exceeded expectations by about 10,000 jobs and signaled a turnaround from the recent sluggishness due mostly to Hurricanes Katrina and Rita. The jobs gain was the biggest since July.

The national unemployment rate remained steady at 5 percent, according to preliminary figures released Friday by the U.S. Department of Labor. The number of unemployed persons -- 7.6 million -- was essentially unchanged in November.

Payroll jobs were added across a broad range of industries, including construction, which added an estimated 37,000 jobs, and manufacturing, up 11,000 jobs, according to the preliminary counts.

Despite the favorable job-growth report, the Dow Jones industrial average fell Friday, partly on concerns about rising interest rates. The Standard & Poor's 500 Index was little changed, as was the Nasdaq.

President Bush, who has been struggling in the polls, seized on the jobs report and other recent positive economic data, saying, "Our economic horizon is as bright as it has been in a long time."

One surprising soft spot in the jobs report, according to Joel Naroff, chief economist for Commerce Bancorp Inc. of New Jersey, was in retailing. He called the retail jobs growth of about 9,000 "a touch disappointing" for the run-up to the holiday shopping season.

Another downbeat note in the otherwise positive report was pointed out by Peter Morici, a business professor at the University of Maryland, who closely watches the jobs picture.

"Clearly, the wages of ordinary working Americans continue to lag inflation with no relief in sight," Morici said. "The average hourly wage increased 0.2 percent, well below the average inflation rate of recent months. Over the last 12 months, wage increases have lagged inflation by about 25 percent."

Morici also noted that the unemployment rate held steady "in large measure because the number of workers not looking for work increased by 148,000."

What that means is that a sizable number of job hunters dropped out of the labor market -- perhaps because they were discouraged about looking and coming up empty, or perhaps because they're taking a job-hunting break during the holidays. When that happens, they are no longer counted among the labor force, which has the effect of lowering the unemployment rate.

The Kansas City area employment picture mirrors the modest payroll growth charted nationally.

Metropolitan area jobs reports lag the national releases, but according to preliminary numbers for October, Kansas City area payrolls grew by about 400 from September, continuing fairly steady payroll increases that have added about 6,100 payroll jobs in the past 12 months.

The Kansas City area unemployment rate was 5.1 percent in October, down from 5.7 percent a year earlier.

The brighter jobs picture came on the heels of last week's report from the Commerce Department that the U.S. economy grew at a 4.3 percent pace in the third quarter.

Generally, economists noted that job and productivity gains were showing up in small and midsized businesses, not the headline-grabbing large companies that continue to announce mass layoff plans for cost-cutting reasons.

On Friday, for example, The Wall Street Journal reported that Ford Motor Co. was considering closing five North American plants that employ about 7,500 workers.

A survey of senior executives and business managers released Friday by NFI Research indicated broader-based optimism about continued payroll growth.

Fifty-five percent of those surveyed said they expected an increased headcount in their businesses over the next 12 months. Twenty-nine percent expected static payrolls, and only 15 percent predicted job cuts.

The jobs report on Friday pegged total employment at 142.6 million; the size of the civilian labor force at 150.2 million; the employment-to-population ratio at 62.8 percent; and the labor force participation rate at 66.1 percent.

This month's employment survey also included specific questions to chart what happened to the work situation of hurricane evacuees.

The report identified 900,000 people aged 16 and over as evacuees. Half said they had returned to their pre-hurricane residences, and 55.2 percent said they were back in the labor force.

The unemployment rate for evacuees overall was 20.5 percent and 12.5 percent for those who had returned to their homes.

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Copyright (c) 2005, The Kansas City Star, Mo.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

NDAQ, DJ, MHP, CBH, F,

Source: The Kansas City Star (Kansas City, Missouri)

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