Sandy, fiscal cliff fears likely slowed hiring in November

Written by admin   // December 9, 2012   // 0 Comments

(Associated Press)
Superstorm Sandy is widely thought to have slowed U.S. job growth last month. The only question is how much – an answer that’s expected to emerge Friday in the government’s jobs report for November.

Yet once the storm’s impact is cleared away, the report may reveal that the job market is strengthening.

Many economists predict employers added fewer than 100,000 jobs last month, and some think it was fewer than 50,000. That would be far below the 171,000 created in October and normally a sign of a weak market. The unemployment rate is expected to remain 7.9 percent.

Analysts caution, though, that Sandy likely reduced the November job gains significantly. And some employers might have delayed hiring because of concerns that the economy will fall off the “fiscal cliff” next year. That’s the name for tax increases and spending cuts that will take effect in January if Congress and the White House fail to reach a budget deal by then.

If not for those factors, some analysts estimate the job gains in November might have been as high as 200,000. That would represent the best month of hiring since February.

Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the Northeast. Many people couldn’t get to work and weren’t paid. The government counts those cases as job losses, even if they are temporary. Those subtractions would reduce net hiring.

One encouraging sign is that the storm’s effect is fading. Weekly applications for unemployment benefits have tumbled in the past three weeks after spiking in early November to an 18-month high of 451,000 because of Sandy.


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