"Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls," says
Mark Zandi, chief economist of Moody's Analytics, the firm that
crunches the ADP numbers. "The manufacturing, retailing, leisure and
hospitality, and temporary help industries were hit particularly hard by
the storm."
Not everyone agrees, but for the moment there's not much to do but
wait for the next number. If Friday's Labor Department update is
considerably weaker than expected, the business cycle outlook will
darken further. Actually, the consensus forecast is already discounting a
sizable slowdown in the government figures: a gain of around 95,000 for
private payrolls in November, or half as much as October's 184,000 pop.
If that estimate holds up, Friday's update will bend but not yet break
the argument that payrolls have succumbed to the darker angels of the
cycle.
What might change the dynamic to something more agreeable? A
resolution of the fiscal cliff nonsense would help. Indeed, by some
accounts, the economy still has a fundamental capacity for growth.
"Outside of Sandy, I think businesses are still hiring," opines
Gus Faucher, an economist with PNC Financial Services. "There's
underlying job growth that's strong enough to employ new entrants into
the labor force as well as some of those who lost their jobs going into
the recession."
That's an intriguing theory, but one that will take time to prove, or
not. The next clue comes in tomorrow's weekly jobless claims report.
The consensus outlook sees more repair and recovery after the
hurricane-related surge in new filings from a few weeks back. But the
R&R is expected to be mild, with only a slight drop to 380,000 from
the previous week's 393,000. Better, but still sluggish enough to keep
everyone guessing.