U.S. private payrolls rise in November; third-quarter compensation revised down

Reuters News
|
Posted: Dec 03, 2014 9:11 AM

WASHINGTON (Reuters) - U.S. private employers added jobs at a fairly brisk clip in November, suggesting a slowing global economy is having a limited impact on domestic activity.

The steady pace of hiring, however, has yet to translate into stronger wage growth. Other data on Wednesday showed sharp downward revisions to compensation in the second and third quarters, suggesting the Federal Reserve had room to maintain its low interest rate policy for a while.

The ADP National Employment Report showed private payrolls increased by 208,000 last month. While that was slightly below Wall Street's expectations for an increase of 221,000 jobs, October's payrolls were revised to show 3,000 more positions added than previously reported.

Private employers have now added jobs for 57 straight months at an average rate of about 186,000 per month.

"The labor market continues to make steady progress," Ahu Yildirmaz, vice president and head of the ADP Research Institute, said on a conference call following the release of the data.

In separate report, the Labor Department said unit labor costs, the price of labor for any given unit of production, fell at a 1.0 percent rate in the third quarter. They had previously been reported to have increased at a 0.3 percent pace.

Unit labor costs for the second quarter were also revised down to show them declining at a steeper 3.7 percent rate instead of the previously reported 0.5 percent pace.

That should ease fears that wage growth is rising a little bit faster than the Fed's expectations and cause the U.S. central bank to wait longer to raise interest rates.

U.S. Treasury debt prices rose on the data. U.S. stock index futures were little changed, while the dollar was up against a basket of currencies.

Wage growth is one of the key factors that will determine when the Fed will start raising its short-term interest rate, which it has kept near zero since December 2008.

Compensation per hour increased at a 1.3 percent rate in the third quarter rather the 2.3 percent pace reported last month.

Compared to the third quarter of last year, hourly compensation rose 2.2 percent instead of the 3.3 percent advance reported last month.

Nonfarm productivity, which measures hourly output per worker, expanded at a 2.3 percent annual rate instead of the previously reported 2.0 percent pace.

(Reporting by Lucia Mutikani; Additional reporting by Dan Burns in New York; Editing by Paul Simao)