Payrolls rose more than anticipated in November and the joblessrate fell to an almost four-year low, indicating superstorm Sandyhad little effect on the U.S. labor market.

Employment climbed by 146,000 following a revised 138,000 gainin October that was less than initially estimated, Labor Departmentfigures showed today in Washington. The median estimate of 91economists surveyed by Bloomberg called for a gain of 85,000. Sandy“did not substantively impact” the data, the agency said. Theunemployment rate fell to 7.7 percent, the lowest since December2008, as size of the labor force shrank.

Gains in hiring indicate consumer spending, the biggest part ofthe economy, will keep expanding. At the same time, concern aboutmore than $600 billion in fiscal tightening slated for early nextyear threatens growth and may set back employment, one reasonFederal Reserve policy makers are weighing increasing stimulus.

“We're making progress in the labor market,” Michael Gapen, aNew York-based senior economist at Barclays Plc, said before thereport. “We expect a return to a pace of hiring that suggests we'removing in the right direction. It's not as fast as policy makerswould like, but employment is growing.”

Bloomberg survey estimates ranged from increases of 15,000 to145,000 after a previously reported 171,000 gain in October. Therevision to the October payrolls figure reflected a 51,000 drop ingovernment jobs.

The unemployment rate in November was forecast to hold at 7.9percent, according to the survey median. Projections ranged from7.9 percent to 8.1 percent.

The poll of households, used to calculate the jobless rate,showed that 369,000 people were not at work because of bad weatherduring the survey week. The average of the last 10 Novembers was70,000. The Labor Department said it conducted the survey a weekearlier than typical because of the Thanksgiving holiday.

Private payrolls, which exclude government agencies, rose to147,000 in November. They were projected to rise by 90,000, thesurvey showed.

The participation rate, which indicates the share of working-agepeople in the labor force, fell to 63.6 percent, from the priormonth's 63.5 percent.

Factory payrolls decreased by 7,000 as job losses in foodmanufacturing and chemicals more than offset gains atautomakers.

A rebound in auto purchases after Sandy signals carmakers anddealers may continue to boost employment. Industry sales of carsand light trucks rose to 15.5 million at an annual rate inNovember, the best pace since February 2008, according to Ward'sAutomotive Group.

Construction Jobs

Employment at private service providers increased by 169,000 inNovember, today's report showed. Payrolls at construction companiesdropped by 20,000 workers.

Average hourly earnings climbed to $23.63 from $23.59 in theprior month. The average work week for all workers held at 34.4hours.

Sandy left about 8 million homes and businesses without powerfor days after making landfall in New Jersey on Oct. 29. The 26counties designated as major disaster areas after the storm had anaverage 1,301 labor force participants per square mile, about 30times the average labor force density for the U.S. in 2011,according to the Labor Department.

Economists were anticipating the jobs report would show Sandydepressed November payrolls. Nomura Securities International Inc.projected a hit of 45,000, Goldman Sachs Group Inc. estimated areduction of about 50,000, while UBS Securities LLC and DeutscheBank Securities Inc. put the fallout at 150,000.

Citigroup Inc. is among companies cutting payrolls. The NewYork-based bank announced this week it will cut more than 11,000jobs and pull back from some emerging markets to drive down costsas revenue dries up.

On the brighter side, an early Thanksgiving may have boostedpayrolls by about 75,000 last month, according to UBS projections,as companies such as retailers took on extra staff sooner thannormal.

Businesses that stepped up hiring for the holidays includeMacy's Inc. The second-biggest U.S. department-store chain said itwould add about 2,000 more seasonal workers than the 78,000 ithired last year. Toys 'R' Us Inc., the world's largest toyretailer, reported plans to employ 45,000 temporary staff, up 5,000from the 2011 season.

At the same time, hiring and investment is being held back byconcern about the so-called fiscal cliff, as well as the globalslowdown in growth.

“We're expecting the same sort of a slow-growth environment,that's our best view of 2013,” Fredrik Eliasson, chief financialofficer of CSX Corp., the largest eastern U.S. railroad, said on aNov. 28 teleconference with analysts. “There are a lot ofuncertainties out there in the world at this point between what'sgoing on here with the fiscal cliff and between Europe andChina.”

Fed officials are considering whether to step up easing tostimulate the economy and trim the jobless rate, which prior toSeptember exceeded 8 percent for 43 consecutive months, the longeststretch in monthly records going back to 1948.

“Although the economy continues to expand, we must grow fasterif we are to put all of our jobless workers and idle businessesback to work,” William Dudley, president of the Federal ReserveBank of New York, said in a Nov. 29 speech. He called theunemployment rate “unacceptably high.”

Bloomberg News

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