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NEW YORK | Wed Nov 30, 2011 1:11pm EST (Reuters) - Companies created the most jobs in nearly a year in November, adding to cautious optimism that the country's battered labor market is working its way toward healing.
Better-than-expected housing and regional factory data released on Wednesday reinforced the view that the economy should avoid recession, though growth is unlikely to be brisk.
"All of this confirms the economy, after slowing in the late spring and early summer, is back firmly at its 2 to 2.5% growth rate," said Steve Blitz, senior economist at ITG Investment Research in New York.
Even so, Blitz added, "Firstly, I need to temper the enthusiasm that these numbers indicate that economic growth is accelerating, and secondly, it's still a very dangerous world out there."
Cautious optimism
The ADP National Employment Report on Wednesday showed private employers added 206,000 jobs this month, surpassing economists' expectations for a gain of 130,000 jobs. It was the biggest gain since December 2010.
The data set an optimistic tone ahead of Friday's more comprehensive government report on the labor market and some economists raised their forecasts.
"So far in the current U.S. economic expansion, the only period of relatively healthy job creation lasted for a few months from late last year to this spring," Ryan Wang, U.S. economist at HSBC Securities USA, wrote in a note.
"Today's job gain of 206,000 in November raises the possibility that we may be on the cusp of a similar period of job creation."
The weak labor market remains one of the biggest hurdles for the economic recovery and is a major concern for President Barack Obama ahead of next year's elections.
Friday's non-farm payrolls report, which includes both public- and private-sector employment, is expected to show a rise in overall non-farm payrolls of 122,000 this month.
While economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, ADP's track record as a predictor has varied.
Mixed bag on productivity
Meanwhile, a separate report showed the number of planned layoffs at U.S. companies edged down marginally in November, though job cuts for the year so far have surpassed 2010's total.
Business activity in the U.S. Midwest grew faster than expected in November, adding to expectations that national manufacturing data should show an uptick in growth when it is released on Thursday.
Separate data showed the rebound in U.S. non-farm productivity growth was not as strong as previously estimated in the third quarter, while wages declined for two straight quarters.
Productivity increased at a 2.3% annual rate, the Labor Department said, a downward revision to its previous estimate of 3.1%.
Additional reporting by Lucia Mutikani and Jason Lange in Washington; Editing by Jan Paschal)
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