No Excess in Labor Market
In recent weeks, auto suppliers like Dana (DCN), Delphi (DPH) and Visteon (VC) have announced plans to lay off thousands of workers, and Yamarone said Ford (F), General Motors (GM) and DaimlerChrysler (DCX) could cut jobs, too.
Nationwide, layoffs rose to 109,045 in December, according to outplacement firm Challenger, Gray & Christmas. Job cuts have now held above 100,000 for four straight months, the first time that has happened since early 2002.
Meanwhile, the four-week moving average of unemployment claims rose in the payroll survey week and the Conference Board's Help Wanted index recently slipped a point.
"Job growth continues to be sluggish, despite periodic reports that some companies are planning to add workers in the months ahead," said economist Ken Goldstein, a specialist in the labor markets.On a more encouraging note, consumers saying jobs are "plentiful" increased to 19.4% in December from 17.1%, while those claiming jobs are "hard to get" fell to 26.4% from 28%, according to the Conference Board's consumer confidence survey. For that and other reasons, economist Brian Jones of Citibank predicts that payrolls surged as much as 300,000 last month. On average, economists estimate that the jobless rate held steady at 5.4% and average hourly earnings are expected to rise 0.2%. Federal Reserve officials believe the labor market is improving "gradually" and some members are becoming increasingly concerned about inflation and the low level of interest rates, the minutes of the Dec. 14 policy meeting show. Still, Dain Rauscher's Boberski thinks the concerns are overblown. "The number of new jobs this year will likely be half the number necessary to re-create pre-recession market conditions," he said. "It is safe to say that managers will be reluctant to try to attract and retain workers with sharply higher wages. That should be welcome news for policymakers eying inflation prospects for the new year."
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