Job creation rises, layoff plans decline in November

An employee scans inventory at the Nintendo of America Inc. distribution center in North Bend, Wash. A report released Wednesday says private employers added 206,000 jobs last month.

NEW YORK -- U.S. companies created the most jobs in nearly a year in November, adding to cautious optimism that the country's battered labor market is healing.

Better-than-expected housing and regional factory data released Wednesday reinforced the view that the economy should avoid recession, though growth is unlikely to be brisk.

"All of this confirms the economy, after slowing in the late spring and early summer, is back firmly at its 2 (percent) to 2.5 percent growth rate," said Steve Blitz, senior economist at ITG Investment Research in New York.

Even so, Mr. Blitz added, "Firstly, I need to temper the enthusiasm that these numbers indicate that economic growth is accelerating, and secondly, it's still a very dangerous world out there."

Janet Yellen, the vice chairman of the U.S. Federal Reserve, said earlier in the week the central bank still has room to ease monetary policy further. The Fed has bought more than $2 trillion in long-term securities in efforts to boost the economy.

The ADP National Employment Report on Wednesday showed private employers added 206,000 jobs this month, surpassing economists' expectations of 130,000 jobs. It was the biggest gain since December.

The data set an optimistic tone ahead of Friday's more comprehensive government report on the labor market and some economists raised their forecasts.

"So far in the current U.S. economic expansion, the only period of relatively healthy job creation lasted for a few months from late last year to this spring," Ryan Wang, U.S. economist at HSBC Securities USA, wrote in a note.

"Today's job gain of 206,000 in November raises the possibility that we may be on the cusp of a similar period of job creation."

Meanwhile, employers in the United States announced fewer job cuts in November than a year earlier, showing the world's largest economy is growing enough to deter firings.

Planned firings dropped 13 percent to 42,474 from November, 2010, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. So far this year, there have been 563,297 announced job reductions, more than the 529,973 for all of 2010.

Government agencies, which had the most cutbacks in November, may continue to shed military and civilian positions in 2012 amid budget cuts, Challenger said.

A separate report showed the number of planned layoffs at U.S. firms edged down marginally in November, though job cuts for the year so far have surpassed 2010's total.

On the housing front, the National Association of Realtors Pending Home Sales Index jumped 10.4 percent to 93.3 from 84.5 the month before. It was the biggest monthly gain since November, 2010.

But that report was tempered as separate data showed applications for home mortgages slumped for the third week in a row last week, hit by a drop in demand for refinancing.

Business activity in the U.S. Midwest grew faster than predicted in November, adding to expectations that national manufacturing data should show an uptick in growth when it is released Thursday.

Separate data showed the rebound in U.S. nonfarm productivity growth was not as strong as estimated for the third quarter, while wages declined for two straight quarters.

Productivity increased at a 2.3 percent annual rate, the Labor Department said, a downward revision to its estimate of 3.1 percent.