U.S. Companies Added Almost 300,000 Jobs in December

U.S. Companies Added Almost 300,000 Jobs in December

Companies in the U.S. boosted payrolls in December by the most since records began in 2001, showing a stronger labor-market recovery at the end of last year, data from a private report showed today.

Employment increased by 297,000, exceeding the highest projection in a Bloomberg News survey, after a revised 92,000 rise in November, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 100,000 gain last month.

Faster job growth will fuel the income gains necessary to further spur consumer spending, which accounts for about 70 percent of the economy. A Labor Department report in two days will show companies added 150,000 workers last month and the unemployment rate eased to 9.7 percent, according to the Bloomberg survey median.

Lexus Top Luxury Auto Ahead of BMW, Mercedes

Lexus outsold  BMW and Mercedes-Benz last month, helping the Japanese brand secure the top spot in U.S. luxury auto sales for the 11th straight year.

Lexus sold 27,560 cars and sport-utility vehicles in December in the U.S. and 229,329 for 2010, the Toyota City, Japan-based automaker said yesterday in a statement. The brand’s sales fell 3.5 percent in December from a year earlier while rising 6.2 percent for all of 2010.

The Lexus annual lead over BMW shrank to 9,216, less than half the 19,473 gap in 2009. Mercedes’s U.S. sales increased 14 percent last year, leaving the Stuttgart, Germany-based automaker’s brand in third.

“It was a bit of a roller coaster” for Lexus last year, said Jessie Toprak an analyst at TrueCar.com, a website that tracks auto sales. “They certainly got impacted negatively by the lingering recall news for Toyota, and we’ve also seen BMW and Benz being more aggressive when it came to incentive spending and marketing.”

U.S. Services: Fastest Expansion Since 2006

Service industries expanded in December at the fastest pace since May 2006, showing the U.S. economic recovery is picking up and broadening beyond manufacturing.

The Institute for Supply Management’s-factory index, which covers about 90 percent of the economy, rose to 57.1, exceeding the median forecast of economists surveyed by Bloomberg News, from 55 in November. A reading greater than 50 signals growth. Another report today showed hiring accelerated.

Improving demand at Fed Ex and Carniva. Corp shows the expansion is extending to areas like retailing and recreation, putting the rebound from the worst recession since the 1930s on firmer footing. The gains may prompt more employers to increase payrolls, one of the missing ingredients that has concerned Federal Reserve policy makers.

Spending is Picking Up; Housing Remains Soft

Consumer spending and new-home sales rose last month while orders for big-ticket goods fell, according to separate reports suggesting the economy will continue to improve gradually.

The labor market also continued its slow healing process as new claims for jobless benefits dipped 3,000 in the week ended Dec. 11 to 420,000. That’s still high, but economists say it’s nearing a level that points to steady job growth.

Retail sales, industrial output and other economic data have improved lately, helping the economy expand at a 2.6% annual rate in Q3 following a lackluster 1.7% pace in the spring.

Economists say growth has continued to accelerate in Q4, but not enough to quickly absorb the millions of workers who lost their jobs during the recession.

Today’s Workers Are Less Likely to Move — So Unemployment Remains High

During the 1930s, hundreds of thousands of people made destitute by drought migrated from Oklahoma and other Dust Bowl states in search of work.

A similar migration occurred among black Americans fleeing discrimination and poor job opportunities in the South.

But the Great Recession has not created a similar migration.  People from states like Nevada, Michigan and California, where unemployment is high, have not moved  to states like North Dakota, Nebraska and New Hampshire with low jobless rates.

The willingness of Americans to move for work has long helped keep unemployment low compared with Europe, where workers are less mobile, analysts say. But falling home values, an aging work force, the slow pace of job creation and a skills mismatch are making Americans less willing or unable to move.