US job market resilient despite budget fight

Published on NewsOK Modified: January 3, 2013 at 8:20 pm •  Published: January 3, 2013
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Congressional Republicans are pressing for deep spending cuts in return for any increase in the borrowing limit. President Barack Obama has repeatedly said wants the issues kept separate.

The economy has added about 150,000 jobs a month, on average, over the past two years. That's too few to rapidly lower the unemployment rate.

Hiring probably won't rise above the current 150,000 per month trend until after the borrowing limit is resolved, economists say.

A similar fight over raising the borrowing limit in 2011 was only settled at the last hour and nearly brought the nation to the brink of default.

"That's not an environment where you're likely to be taking risks," such as boosting hiring, said Nigel Gault, chief U.S. economist at IHS Global Insight.

Even with modest gains in hiring, the unemployment rate remains high. It fell to 7.7 percent in November from 7.9 percent in October. But that was mostly because many of the unemployed stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.

The number of people receiving jobless benefits fell to 5.4 million in the week ended Dec. 15, the latest data available. That's down about 70,000 from the previous week. The figure includes about 2.1 million people receiving emergency benefits paid for by the federal government. The White House and Congress agreed earlier this week to extend that program for another year.

There are signs the economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs this year. Companies ordered more long-lasting manufactured goods in November, a sign they are investing more in equipment and software. And Americans spent more in November. Consumer spending drives nearly 70 percent of economic growth.

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AP Economics Writer Martin Crutsinger contributed to this report. Follow Chris Rugaber at http://Twitter.com/ChrisRugaber