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By Courtney Schlisserman
May 2 (Bloomberg) -- The U.S. probably lost jobs in April for a fourth month and the unemployment rate rose as economic growth stalled, economists said before a government report today.
Payrolls shrank by 75,000 workers after decreasing by 80,000 in March, according to the median estimate of 82 economists surveyed by Bloomberg News before the Labor Department's report. The jobless rate rose to a three-year high of 5.2 percent, the survey also showed.
The economy is on the brink of a recession as soaring fuel prices and the collapse in housing cause consumers and businesses to retrench. Americans may continue to rein in spending as wages stagnate, property values fall and credit remains scarce, indicating hiring will continue to slump.
``Businesses are getting very cautious,'' Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. ``They're going to wait to see consumers start coming back before you start to see hiring again. We're in a little bit of a vicious circle.''
The rate on the 10-year Treasury bond was little changed at 3.76 percent as of 12:18 p.m. in London. It fell 11 basis points this week, the first decline since the period ended March 21. A basis point is 0.01 percentage point.
The dollar was also little changed, trading at $1.5463 per euro and 105 yen.
Streak of Declines
The report is due at 8:30 a.m. in Washington. Payroll estimates in the Bloomberg survey ranged from declines of 150,000 to 18,000. A fourth consecutive drop would be the longest string of decreases since the start of the Iraq War in 2003.
Forecasts for the unemployment rate ranged from 5 percent to 5.3 percent, according to the Bloomberg survey.
Another report today is projected to show factory orders rose 0.2 percent in March, according to economists surveyed, reflecting a jump in raw-materials costs that inflated demand for non-durable goods like petroleum. The Commerce Department is scheduled to release the report at 10 a.m.
Federal Reserve policy makers this week lowered the benchmark overnight lending rate between banks by a quarter percentage point, to 2 percent, in a bid to revive the economy. The government also started sending out tax rebate checks that were part of its fiscal stimulus plan.
Fed Statement
``Household and business spending has been subdued and labor markets have softened further,'' the central bank said April 30 in announcing its decision. It also said that the easing that has taken place since last year, along with efforts to stabilize financial markets ``should help to promote growth over time.''
The U.S. economy expanded at a 0.6 percent annual pace in the first quarter, the Commerce Department said on April 30, as inventories increased because consumer spending slowed and business investment dropped. The rise in stockpiles, along with the smallest gain in household spending in seven years, indicates the economy will weaken further in coming months.
``There is no end in sight to the economic slump,'' Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a note to clients following the gross domestic product report.
Construction firms and financial-service companies have been among the hardest hit by the drop in housing, which is now in its third year. Wall Street banks and securities firms, reeling from $309 billion in mortgage losses and writedowns, have slashed 48,000 jobs in the past 10 months, according to the Securities Industry and Financial Markets Association.
Job Cuts
Merrill Lynch & Co., the third-biggest U.S. securities firm, said April 17 it would cut about 3,000 more jobs after the credit-market crisis forced it to write down some $6.5 billion in debt.
Job losses have started to ripple to other areas of the economy as spending sags. The payroll report for March showed retailers, transportation firms and temporary-help agencies reduced staff.
The Institute for Supply Management said yesterday that its factory employment index dropped to the lowest level since May 2003. The group is scheduled to release results on non- manufacturing next week.
Economists forecast manufacturing payrolls declined by 35,000 last month, according to the survey median. Factories lost 48,000 jobs in March.
General Motors Corp., the world's largest automaker, this week said it's cutting production of large pickup trucks and sport-utility vehicles this year at four plants in the U.S. and Canada because of slowing sales. The plan affects 3,550 workers.
Bloomberg Survey
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Nonfarm Unemploy Manu Factory
Payrolls Rate Payrolls Orders
,000's % ,000's MOM%
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Date of Release 05/02 05/02 05/02 05/02
Observation Period April April April Jan.
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Median -75 5.2% -35 0.2%
Average -77 5.2% -38 0.2%
High Forecast -18 5.3% -15 1.0%
Low Forecast -150 5.0% -60 -1.3%
Number of Participants 82 80 19 59
Previous -80 5.1% -48 -1.3%
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4CAST Ltd. -140 5.2% --- ---
Action Economics -60 5.2% -35 0.2%
AIG Investments -50 5.2% --- -0.3%
Aletti Gestielle SGR -70 5.2% -47 0.1%
Allianz Dresdner Economic -70 5.1% --- 0.0%
Argus Research Corp. -20 5.0% -15 0.7%
Banc of America Securitie -70 5.1% --- ---
Bancolombia SA -50 --- --- ---
Bank of Tokyo- Mitsubishi -25 5.3% -45 0.1%
Bantleon Bank AG -50 5.2% --- -0.2%
Barclays Capital -75 5.2% --- 0.4%
BBVA -100 5.2% --- ---
Bear, Stearns & Co. -75 5.1% --- 0.5%
BMO Capital Markets -80 5.2% --- -1.3%
BNP Paribas -95 5.1% --- 0.2%
Briefing.com -70 5.2% --- ---
Calyon -45 5.2% --- 0.5%
CEMEX -73 5.2% --- ---
CFC Group -45 5.1% --- 0.1%
CIBC World Markets -100 5.2% --- 0.3%
Citi -100 5.2% --- 0.3%
ClearView Economics -60 5.0% -35 -1.0%
Commerzbank AG -80 5.1% -20 -0.1%
Credit Suisse -75 5.2% --- 1.0%
Daiwa Securities America -90 5.2% --- 0.2%
Danske Bank -40 5.2% --- ---
DekaBank -60 5.2% --- 0.3%
Desjardins Group -125 5.1% --- 0.0%
Deutsche Bank Securities -100 5.2% --- -0.5%
Deutsche Postbank AG -80 5.2% --- 0.1%
Dresdner Kleinwort -105 5.2% -35 1.0%
DZ Bank -100 5.2% --- 0.0%
First Trust Advisors -40 5.1% -45 0.3%
Fortis -50 5.1% --- ---
Global Insight Inc. -100 5.2% --- ---
Goldman, Sachs & Co. -75 5.2% --- 0.5%
H&R Block Financial Advis -70 5.1% -40 ---
Helaba -50 5.1% --- 0.3%
High Frequency Economics -100 5.2% --- 0.0%
Horizon Investments -50 5.2% --- 0.3%
HSBC Markets -50 5.2% --- 0.4%
IDEAglobal -100 5.2% -50 ---
ING Financial Markets -150 5.3% --- 0.0%
Insight Economics -75 5.2% --- 0.0%
Intesa-SanPaulo -90 5.2% --- ---
J.P. Morgan Chase -90 5.2% --- 0.7%
Janney Montgomery Scott L -57 5.2% --- 0.0%
JPMorgan Private Client -80 5.2% -45 -0.3%
Landesbank Berlin -30 5.0% --- 0.1%
Landesbank BW -85 5.2% --- 0.0%
Lehman Brothers -90 5.1% --- -0.1%
Lloyds TSB -50 5.2% -30 0.5%
Maria Fiorini Ramirez Inc -90 5.2% --- 0.0%
Merrill Lynch -90 5.2% --- 0.2%
MFC Global Investment Man -100 5.2% -60 0.0%
Moody's Economy.com -80 5.2% -35 0.8%
Morgan Keegan & Co. -68 5.1% --- 0.4%
Morgan Stanley & Co. -80 5.2% --- 0.5%
National Bank Financial -100 5.3% --- ---
National City Corporation -18 5.0% --- -0.1%
Natixis -100 5.2% --- ---
Newedge -60 5.2% --- ---
Nomura Securities Intl. -110 5.2% -40 0.7%
Nord/LB -110 5.1% -35 0.3%
PNC Bank -70 5.2% -30 0.0%
RBS Greenwich Capital -75 5.2% --- ---
Ried, Thunberg & Co. -75 5.2% --- ---
Scotia Capital -90 5.2% --- 0.2%
Societe Generale -50 5.2% --- ---
Standard Chartered -85 --- --- ---
Stone & McCarthy Research -95 5.1% -48 0.5%
TD Securities -120 5.2% --- ---
Thomson Financial/IFR -65 5.1% --- 0.5%
Tullett Prebon -100 5.2% --- 0.4%
UBS Securities LLC -100 5.3% --- -0.2%
Unicredit MIB -75 5.2% --- ---
University of Maryland -60 5.2% -35 0.0%
Wachovia Corp. -44 5.2% --- ---
Wells Fargo & Co. -60 5.2% --- 0.2%
WestLB AG -95 5.2% --- -0.1%
Westpac Banking Co. -110 5.1% --- -0.5%
Wrightson Associates -75 5.2% --- ---
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To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net.
Last Updated: May 2, 2008 08:10 EDT
