NEW YORK - December capped one of the gloomiest years for the U.S. job market, but staffing executives and analysts on Friday forecast a brighter picture in 2004.
A U.S. Labor Department report on Friday showed that the number of workers on U.S. payrolls outside the farm sector rose by just 1,000 in December, less than 1 percent of economists' estimates for a 130,000 increase.
However, 30,000 temporary jobs were added, in the eighth consecutive monthly gain, bringing the total temporary jobs for 2003 to 166,000.
"The anemic job creation defied all expectations and doesn't fit a lot of what I hear from our customers," said Carl Camden, chief operating officer of staffing firm Kelly Services Inc.
"For the staffing sector, the news was generally positive as the number of temporary employees were up over 7 percent in year-over-year comparison," he said.
Still, staffing stocks edged lower on the overall negative tone of the report, analysts said.
Kelly Services fell 78 cents, or 2.6 percent, to close at $29.33 on Nasdaq. Adecco SA (ADO.N: Quote, Profile, Research) , the world's biggest staffing firm, edged down 10 cents, or 0.6 percent, to $16.93 on the New York Stock Exchange. Industry No. 2 Manpower Inc. slid 95 cents, or 1.9 percent, to $47.90 on the NYSE.
"Staffing stocks always react to the (jobs) data and the general mood in the market was that the employment numbers were disappointing," said Harris Nesbitt Gerard analyst Jeffrey Silber.
"But this data is notorious for its revisions and so I am not spooked by one month's worth of a slowdown."
HIRING SLOW AS THE YEAR ENDED
Some companies attribute the grim December data to a seasonal slowdown.
"The numbers don't dampen my optimism for 2004, simply because December is a relatively inactive period for hiring," said Paul Sarvadi, chief executive of Administaff Inc., a provider of human resources services.
Jobs were also lost as companies continued to cut costs.
About 26,000 manufacturing jobs were slashed in December, in the industry's 41st month of declines, the report showed. The retail sector lost 38,000 jobs.
"Apparently, we managed to sell a good bit more products this year without a corresponding lift in the number of people," Camden of Kelly Services said. "Companies are still cautious on permanent hiring in general while they restore their earnings."
But temporary hiring continued its upward trend, offering some optimism for job seekers. Temp workers allow companies to save on health costs and other benefits provided to permanent employees.
"Job growth is by no means booming," Silber said. "But I will bet in 2004 we will at least add some jobs in the U.S. economy, which will be the first time since 2000."
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