Private sector adds 206,000 jobs in November, beating expectations

NEW YORK ― The pace of job growth in the economy’s private sector accelerated in November, with U.S. employers adding 206,000 jobs, a report by a payrolls processor showed on Wednesday.

The ADP National Employment Report surpassed economists’ expectations for a gain of 130,000 jobs, according to a Reuters survey. October’s private payrolls were revised up to an increase of 130,000 from the previously reported 110,000.

The report is jointly developed with Macroeconomic Advisers LLC.

“The ADP news is very good news. The private sector is adding jobs,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

U.S. stocks index futures added to gains immediately after the data, though investors were also focused on an announcement of coordinated actions from major central banks to provide liquidity to the global financial system.

Treasuries prices extended losses after the data.

The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment.

That report is expected to show a rise in overall nonfarm payrolls of 122,000 this month and a rise in private payrolls of 140,000.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

Federal Reserve’s Yellen sees scope for further easing

SAN FRANCISCO ― Janet Yellen, the Federal Reserve’s influential vice chair, said on Tuesday the U.S. central bank has room to ease monetary policy further, possibly by providing more information on the path of interest rates.

A second top official, Atlanta Federal Reserve Bank President Dennis Lockhart, said he sees a benefit in providing more information on the policy assumptions underlying Fed forecasts. He made clear, however, that he believes the current policy stance is appropriate.

With its usual economic lever of interest rates already pressed close to zero and its balance sheet triple the size of its pre-crisis norm, the central bank has been considering how it can better use communications as a policy tool.

The Fed has been debating for months ways to provide more clarity on when it might eventually tighten monetary policy, although officials have differed on how best to proceed.

Yellen said turmoil in financial markets stemming from both Europe’s banking crisis and general uncertainty about the outlook had increased the risks to the global economy, and that the Fed could offer additional support to U.S. growth.

“The scope remains to provide additional accommodation through enhanced guidance on the path of the federal funds rate or through additional purchases of long-term financial assets,” she told a conference sponsored by the San Francisco Federal Reserve Bank.

A number of communications shifts are being discussed, including a controversial proposal from the Chicago Fed president to allow for temporarily higher inflation. Officials are also considering offering explicit forecasts for the overnight federal funds rate.

The deputy governor of Sweden’s central bank, Lars Svensson, urged the Fed to begin providing forecasts for short-term rates as a way to push borrowing costs lower.

“Publishing a policy-rate path would be the most direct way to affect interest-rate expectations, especially since central banks should have better information about their intentions than anyone else,” he told the San Francisco Fed conference.

Retail sales beat expectations in October; signs indicate some vigor

WASHINGTON ― Retail sales rose more than expected in October as strong receipts from motor vehicle and building material dealers offset the drag from service stations, suggesting the economy started the fourth quarter with some vigor.

Total retail sales increased 0.5 percent, the Commerce Department said on Tuesday, after rising by an unrevised 1.1 percent in September. Economists polled by Reuters had forecast retail sales climbing 0.3 percent last month. In the 12 months to October, retail sales were up 7.2 percent.

While October’s retail sales report showed broad gains, weak income growth remains a constraint.

Consumer spending — which accounts for more than two-thirds of U.S. economic activity — rose at its fastest pace in nearly a year in the third quarter. But households are significantly cutting back on saving to fund their spending.

Retail sales last month rose as receipts from motor vehicle dealers increased 0.4 percent, adding to the prior month’s 4.2 percent gain. Excluding autos, retail sales rose 0.6 percent, the largest increase in seven months, after advancing 0.5 percent in September.

Sales at food and beverage stores increased 1.1 percent, while receipts at sporting goods, hobby, book and music stores gained 1.3 percent. Sales of electronics and appliances soared 3.7 percent, while receipts from building material retailers increased 1.5 percent.

But clothing store sales fell 0.7 percent last month, the largest decline since December 2010, while furniture sales declined 0.7 percent.

Receipts at gasoline stations fell 0.4 percent last month after rising 0.7 percent. The decline reflects weak gasoline prices. According to the U.S. Energy Information Administration, gasoline prices fell 4.39 percent or 16 cents to $3.506 a gallon in October. Excluding gasoline, retail sales rose 0.7 percent.

Weak gasoline prices, combined with subsiding inflation pressures should ease the burden on stretched household budgets and support holiday shopping.

Core retail sales, which exclude autos, gasoline and building materials, rose 0.7 percent in October after advancing0.5 percent the prior month.

Core sales correspond most closely with the consumer spending component of the government’s gross domestic product report.