US job gains defy Sandy and fears of fiscal cliff

Published on NewsOK Modified: December 7, 2012 at 6:10 pm •  Published: December 7, 2012
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Investors appeared pleased with the report. The Dow Jones industrial average closed up 81 points.

For now, worries about the cliff have led some companies to cut back on purchases of heavy equipment. Consumers are also signaling concern. A survey of consumer sentiment fell sharply in December, economists noted, partly over worries that taxes could rise next year.

But a resolution of the cliff could accelerate job growth in the construction and manufacturing industries. Those sectors, on average, pay more than the retail and restaurant jobs that have helped drive hiring in recent months and tend to contribute more to economic growth.

Construction workers earned an average of $26 an hour in November. Factory workers averaged $24 an hour. Both far exceed the hourly average of $16.40 for retail employees and about $13.40 for hotel, restaurant and other hospitality workers.

"The good news is not that the labor market is improving rapidly — it isn't — but that employment growth is holding up despite all the fears over the fiscal cliff," Gault said.

He estimates that a budget deal would boost the economy's average monthly job gains to about 200,000 next year.

One company that could step up hiring in 2013 is Ahaus Tool & Engineering in Richmond, Ind., which makes assembly machines for the automotive and power-generation industries.

Kevin Ahaus, president of the 90-person company and the fourth generation of his family to run it, says the company had its best year ever in the 12 months that ended in September. But since October, sales have leveled off. Many customers are asking for bids but not closing deals, Ahaus said, because of the uncertain economic outlook.

That, in turn, is causing him to delay hiring.

"I probably won't hire anybody until the first of the year because of all the unknowns out there," he said.

Many analysts thought Sandy would hold back job growth significantly in November because the storm forced restaurants, retailers and other businesses to close in late October and early November.

It didn't. In part, that's because the storm struck Oct. 29, but as long as employees had returned to work by Thanksgiving week, the survey counted them as employed.

Yet there were signs that the storm disrupted some areas of the economy in November. Construction employment dropped 20,000, for example.

Retailers added 53,000 positions last month, a sharp gain that likely reflected holiday hiring. Auto manufacturers added nearly 10,000 jobs. But overall manufacturing jobs fell by 7,000, partly a result of 12,000 jobs lost in food manufacturing that likely reflected layoffs at Hostess Brands Inc.

The rebound in housing is leading Georgia Pacific, a paper and wood products company, to hire. It is opening a new plant in South Carolina next year and is filling 140 jobs. So far, it's received 2,400 applications.

"It's a little overwhelming from an HR perspective," said Julie Brehm, vice president of human resources.