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Friday, December 05, 2003

This is Hardly Unexpected

So this months US job creation figures are worse than expected, and next months will be better: so what happens? One thing we do know is at the moment the trend is up - we are in recovery phase - but maybe not as strongly as some might think. My feeling is that we are seeing the crossing of two tendencies: fisrtly the entry into the labour market of latge numbers of immigrant decsendents - which is obviously good for growth - and a rapid increase in restructuring and outsourcing, which in the short term may not be so good. How will this work out: wait and see.

American employers hired far fewer workers than expected in November, a government report showed on Friday, though the gain was the fourth consecutive monthly increase in jobs and the unemployment rate fell.

The number of workers on U.S. payrolls outside the farm sector in November edged up by 57,000, the Labor Department (news - web sites) said, from an upwardly revised climb of 137,000 the previous month.

The November gain was far lower than forecasts for a bumper increase of 150,000.

"The headline nonfarm payrolls number is not great ... but actually I think the underlying data are brighter than the headline," said Lara Rhame, senior economist at Brown Brothers Harriman.

The dollar weakened on the lower-than-expected jobs number but bond prices surged.

Analysts had ratcheted up their forecasts after recent data showed the economic recovery gaining strength. The government said last month the economy grew a rapid 8.2 percent in the third quarter of the year, leading to expectations that this would translate into a pick-up in hiring.

The labor market has lagged other areas of the economy in showing recovery, partly because surging productivity gains have allowed companies to boost output with fewer workers.
Source: Yahoo News

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