Employment in U.S. Probably Dropped on Census Cutbacks

Employment fell in June for the first time this year, reflecting a drop in federal census workers as the decennial population count began to wind down, economists said before a report today.

Payrolls declined by 130,000 last month, according to the median estimate of 82 economists surveyed by Bloomberg News. Private employment, which excludes government jobs, rose for a sixth consecutive month, the survey showed.

The pace of hiring signals it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007. The turmoil in financial markets brought on by the European debt crisis raises the risk that employment will slow, depriving American households of the income needed to maintain spending.

“The recovery downshifted a gear in recent months,” said David Resler, chief economist at Nomura Securities International Inc. in New York. Payroll gains will probably be “consistent with moderate growth in income and spending.”

Figures from the Labor Department show the number of workers helping conduct the census dropped by about 230,000 from mid May to mid June, the period corresponding to the government’s jobs survey. The decrease still left 344,000 people on the census payroll, indicating more cuts to come that will keep distorting the employment figures for months.

Private Payrolls

For that reason, economists say private payrolls, which exclude government jobs, will be a better gauge of the state of the labor market for much of 2010. Employment at companies rose by 110,000 after a 41,000 gain in May, according to the median forecast of 50 economists surveyed.

The report will also show the unemployment rate rose to 9.8 percent last month from 9.7 percent in May, according to the survey. Joblessness, which reached a 26-year high of 10.1 percent in October, will take time to recede as the number of previously discouraged jobseekers returning to the labor force exceeds the number of available jobs.

Factory payrolls increased in June for the sixth straight month, according to the survey.

Those gains may slacken as the industry leading the U.S. economic expansion cools. A report yesterday from the Tempe, Arizona-based Institute for Supply Management showed manufacturing expanded in June at the slowest pace of the year as orders and exports decelerated.

Sales and inventories “are very much in sync,” Samuel Allen, chief executive officer of Deere & Co., said in an interview June 23, in a reference to the manufacturer’s agricultural business. The Moline, Illinois-based company also has started adding stockpiles on the construction side in recent months, he said.

‘Moving Slowly’

“We do believe the recovery is under way,” Allen said. “We do believe it is moving slowly. We do believe it is on stable ground at this time.”

Manufacturers have avoided the worst of the market turmoil. The Standard & Poor’s Supercomposite Industrial Machinery Index of 52 companies, including Caterpillar Inc. and Deere, has decreased 0.1 percent so far this year compared with a 7.9 percent decline in the broader S&P 500.

President Barack Obama, after meeting with Federal Reserve Chairman Ben S. Bernanke June 29, said the U.S. economy is strengthening even as the European debt crisis has weakened financial markets.

“We have seen some very positive trends in a number of sectors,” Obama said at the White House after meeting with his economic advisers. “Unfortunately, because of the troubles we’ve seen in Europe, we’re now seeing some headwinds and skittishness and nervousness on the part of the markets.”

November Elections

The economy, jobs and the budget deficit are likely to be top issues in November elections that will decide control of Congress. Heading into the campaign season, the administration is facing public pessimism about the direction of the economy.

The Fed last month said slowing inflation and the fallout from Europe’s debt crisis where among reasons it will maintain interest rates low for “an extended period.”

Delta Air Lines Inc., the world’s biggest carrier, is starting to add staff. Atlanta-based Delta will hire 700 airport ticket and gate agents to help handle increased summer traffic and operations disrupted by weather, Chris Kelly, a Delta spokeswoman, said June 18 in an interview. The new positions are in addition to the 300 pilot and 300 reservation agent jobs recently filled by the Atlanta-based airline.

                        Bloomberg Survey
==============================================================
                           Nonfarm  Private     Manu Unemploy
                          Payrolls Payrolls Payrolls     Rate
                            ,000’s   ,000’s   ,000’s        %
==============================================================

Date of Release              07/02    07/02    07/02    07/02
Observation Period            June     June     June     June
--------------------------------------------------------------
Median                        -130      110       25     9.8%
Average                       -121      111       24     9.8%
High Forecast                    0      200       40     9.9%
Low Forecast                  -250       12       10     9.5%
Number of Participants          82       50       21       81
Previous                       431       41       29     9.7%
--------------------------------------------------------------
4CAST Ltd.                    -140     ---      ---      9.6%
Action Economics              -160       80       10     9.8%
Aletti Gestielle SGR          -100      137       30     9.8%
Ameriprise Financial Inc      -150      100       20     9.9%
Banesto                        -45     ---      ---      ---
Bank of Tokyo- Mitsubishi     -115      113       30     9.7%
Bantleon Bank AG              -100     ---      ---      9.8%
Barclays Capital              -100     ---      ---      9.6%
Bayerische Landesbank          -85     ---      ---      9.8%
BBVA                           -60      111       40     9.8%
BMO Capital Markets           -200       50     ---      9.8%
BNP Paribas                   -150       50     ---      9.8%
BofA Merrill Lynch Research   -125      125     ---      9.8%
Briefing.com                  -145     ---      ---      9.8%
C I T I C Securities             0      110     ---      9.7%
Capital Economics             -100      150     ---      9.8%
CIBC World Markets             -50     ---      ---      9.8%
Citi                          -130      110     ---      9.7%
ClearView Economics           -100      200       25     9.8%
Commerzbank AG                -100      150     ---      9.7%
Credit Agricole CIB           -200       50     ---      9.8%
Credit Suisse                 -170       75     ---      9.7%
Daiwa Securities America      -150     ---      ---      9.8%
Danske Bank                   -100      150     ---      ---
DekaBank                      -130      100     ---      9.7%
Desjardins Group               -75     ---      ---      9.9%
Deutsche Bank Securities      -150      100     ---      9.6%
Deutsche Postbank AG           -50     ---      ---      9.7%
DZ Bank                       -140     ---      ---      9.8%
Exane                         -100     ---      ---      9.7%
First Trust Advisors           -50     ---        25     9.7%
Fortis                        -160      100     ---      9.8%
FTN Financial                 -165     ---      ---      9.8%
Goldman, Sachs & Co.          -100     ---      ---      9.8%
Helaba                         -30     ---      ---      9.7%
High Frequency Economics      -200       50     ---      9.8%
HSBC Markets                  -155      105     ---      9.8%
Hugh Johnson Advisors         -120     ---        20     9.7%
IDEAglobal                     -80      150       25     9.7%
IHS Global Insight            -140      120     ---      9.8%
Informa Global Markets        -160     ---        30     9.8%
ING Financial Markets         -250       15       30     9.9%
Insight Economics             -125      125     ---      9.9%
Intesa-SanPaulo                -70     ---      ---      9.7%
J.P. Morgan Chase              -90      170       10     9.8%
Janney Montgomery Scott        -40      135     ---      9.9%
Jefferies & Co.               -125      110       25     9.7%
Landesbank Berlin             ---      ---      ---      9.7%
Landesbank BW                  -40      180     ---      9.7%
Maria Fiorini Ramirez         -190       50     ---      9.8%
MF Global                     -170       90       10     9.8%
MFC Global Investment         -115      125       20     9.7%
Mizuho Securities             ---        50     ---      9.8%
Moody’s Economy.com           -155      100       25     9.8%
Morgan Keegan & Co.           -178     ---      ---      ---
Morgan Stanley & Co.           -90     ---      ---      9.8%
National Bank Financial       -150     ---      ---      9.8%
Natixis                       -150     ---      ---      9.8%
Nomura Securities Intl.       -155      100       30     9.7%
Paragon Research              -160     ---      ---      9.9%
Pierpont Securities LLC        -80      170     ---      9.6%
PineBridge Investments        -152     ---      ---      9.7%
PNC Bank                       -25      100       20     9.7%
Prestige Economics            -125     ---      ---      9.8%
Raiffeisen Zentralbank         -60      200     ---      9.7%
Raymond James                 -155       95     ---      9.7%
RBC Capital Markets           -135     ---      ---      9.8%
RBS Securities Inc.            -90      160     ---      9.6%
Ried, Thunberg & Co.          -130      125     ---      9.5%
Societe Generale               -60      150     ---      9.6%
Standard Chartered            -188       12     ---      9.8%
State Street Global Markets   -158       88       19     9.8%
Stone & McCarthy Research      -50     ---        30     9.8%
Thomson Reuters/IFR           -150      110     ---      9.8%
Tullett Prebon                -160     ---      ---      9.8%
UBS                           -150      100     ---      9.7%
UniCredit Research            -130     ---      ---      9.8%
Union Investment               -75     ---      ---      9.8%
University of Maryland        -150      100       20     9.8%
Wells Fargo & Co.             -130       95     ---      9.7%
WestLB AG                     -130     ---      ---      9.8%
Westpac Banking Co.              0      180     ---      9.9%
Woodley Park Research         -182     ---      ---      9.7%
Wrightson Associates          -130      125     ---      9.5%
==============================================================

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.