WASHINGTON – The government is expected to report Friday that businesses stepped up hiring in December, a trend likely to gain momentum in 2011.
Economists are predicting that employers added a net total of 145,000 jobs last month and that the unemployment rate dipped to 9.7 percent.
Some are even more optimistic after a private payroll firm estimated this week that companies added nearly 300,000 jobs in December. Also encouraging was a report that fewer people applied for unemployment benefits over the past month than in any four-week period in more than two years.
A decline in layoffs has consumers feeling better about the economy and spending more freely. This past holiday shopping season was the best in four years.
And a payroll tax cut that goes into effect this month will give Americans even more money in the new year. Economists expect that will boost economic growth and give businesses more confidence to hire.
"Consumers are no longer as concerned about their job security, and that's giving them a little more confidence to go out and spend," said Ryan Sweet, an economist at Moody's Analytics.
The economy needs to generate about 125,000 jobs a month just to keep up with population growth and prevent the unemployment rate from rising. More than double that amount is needed to reduce the rate. Read More...
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