Job market resilient despite federal budget battle
WASHINGTON — The job market showed resilience in three reports on Thursday, suggesting it might withstand a federal budget battle that threatens more economic uncertainty in coming months.
A survey showed private hiring increased last month, while layoffs declined and applications for unemployment benefits stayed near a four-year low. The data led some economists to raise their forecasts for December job growth one day before the government releases its closely watched employment report.
“The job market held firm in December despite the intensifying fiscal cliff negotiations,” said Mark Zandi, chief economist at Moody's Analytics. “Businesses even became somewhat more aggressive in their hiring at year end.”
The most encouraging sign came from payroll provider ADP. Its monthly employment survey showed businesses added 215,000 jobs last month, the most in 10 months and much higher than November's total of 148,000.
Economists tend to approach the ADP survey with some skepticism because it has diverged sharply at times from government figures. The Labor Department releases its employment report on Friday. Most expect the report will show employers added 150,000 jobs last month.
and the unemployment rate stayed at 7.7 percent.
Some economists saw potential for stronger gains after seeing Thursday's data.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank, raised his forecast for job growth in December to 190,000 jobs, up from 150,000.
Credit Suisse increased its forecast to 185,000, up from 165,000.
“Given that we have restraints, the labor market data do appear to be improving,” said Dana Saporta, an economist at Credit Suisse.
Still, many economists remain cautious about where the job market is headed.
While Congress and the White House reached a deal this week that removed the threat of tax increases for most Americans, they postponed the more difficult decisions on cutting spending.
And the government must increase its $16.4 trillion borrowing limit by late February or risk defaulting on its debt.
The economy has added about 150,000 jobs a month, on average, over the past two years. That's too few to rapidly lower the unemployment rate.
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