Company Hiring Probably Rose at Pace Showing Slow U.S. Rebound
Delta Air Lines CEO Richard Anderson
Tomohiro Ohsumi/Bloomberg
Delta Air Lines CEO Richard Anderson said that Delta plans to hire 1,000 workers at its 25 biggest U.S. airports.
Delta Air Lines CEO Richard Anderson said that Delta plans to hire 1,000 workers at its 25 biggest U.S. airports. Photographer: Tomohiro Ohsumi/Bloomberg
Aug. 6 (Bloomberg) -- Jan Hatzius, chief economist for Goldman Sachs, talks about the outlook for the U.S. jobs market and economy. Hatzius speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Aug. 5 (Bloomberg) -- Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, talks with Bloomberg's Rishaad Salamat about the outlook for the U.S. economy and housing market. Consumer spending, pending home sales and factory orders were all weaker than projected in June, showing the U.S. recovery lost momentum heading into the second half of the year as employment stagnates. Household purchases, which account for about 70 percent of the economy, were unchanged from May, according to figures from the Commerce Department issued Aug. 3 in Washington. (Source: Bloomberg)
U.S. company hiring will be slow to recover from the worst labor market since the end of World War II, economists said before a government report today.
Private payrolls that exclude government agencies rose by 90,000 workers after growing by 83,000 in June, according to the median estimate of 54 economists surveyed by Bloomberg News. The report may also show total employment fell by 65,000, reflecting a drop in federal census workers, and the jobless rate rose.
The economy has recouped 11 percent of the 8.4 million jobs lost in the recession that began December 2007, a proportion that’s kept consumer spending from accelerating. While growth has slowed and Federal Reserve Chairman Ben S. Bernanke has described the outlook as “unusually uncertain,” financial markets have rebounded: the Standard & Poor’s 500 Index last month climbed the most in a year and oil and copper rallied.
“It’s a bit of a pause in the very early stages of a labor-market recovery,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “If we’re going to get continued growth and activity, firms have to hire. The labor market is still incredibly weak.”
Today’s report will show the jobless rate rose to 9.6 percent last month from 9.5 percent in June, according to the survey median. Unemployment, 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, economists said.
Survey Results
The Labor Department report is scheduled for 8:30 a.m. in Washington. Estimates from economists surveyed called for gains in private employment ranging from 20,000 to 150,000.
Delta Air Lines Inc., the world’s largest carrier, plans to hire 1,000 workers at its 25 biggest U.S. airports to help with planes that are flying with near-record percentages of seats filled and cope with weather disruptions, Chief Executive Officer Richard Anderson said last month.
Ford Motor Co., the second-largest U.S. automaker, said this week it plans to add 27 percent more positions at its U.S. plants than originally planned. Ford agreed to add 1,975 jobs, 416 more than it originally intended, by 2012 to do work traditionally done by suppliers. The jobs at nine U.S. plants will be filled by a mix of idled current Ford workers and new hires, Jennifer Flake, a spokeswoman, said in an interview.
While Ford and Delta are adding, United Technologies Corp. is among companies reducing payrolls. The Hartford, Connecticut- based maker of Carrier, Pratt & Whitney and Sikorsky products said July 26 that it expects to cut about 2,400 hourly and salaried positions. It eliminated 900 of the jobs as of June 30 and will cut the rest this and next year.
Census Jobs
Economists’ projections for total employment ranged from a decline of 160,000 to an increase of 10,000. The Census Bureau said it let go about 144,000 of the people conducting the decennial population count from mid-June to mid-July. It still had about 200,000 temporary workers on staff as of July 17, indicating additional cuts to come that will keep distorting the payroll figures for months.
For that reason, economists say private payrolls will be a better gauge of the state of the labor market for much of 2010. Companies added workers at a faster pace earlier this year, boosting payrolls by 158,000 in March and 241,000 in April, according to Labor Department figures.
Factory payrolls increased in July for the seventh straight month, the survey showed. Manufacturers added 13,000 workers after a gain of 9,000 in June.
Those gains may slacken as the industry leading the U.S. economic expansion cools. A report this week from the Tempe, Arizona-based Institute for Supply Management showed manufacturing expanded in July at the slowest pace of the year as new orders and production decelerated.
Materials Costs
Prices for industrial raw materials are signaling the global economy will avoid falling back into recession, according to Edward Yardeni, president and chief investment strategist at Yardeni Research Inc. in New York.
The Commodity Research Bureau/Reuters index of 13 materials for immediate delivery, which Yardeni last month said was among the best gauges of the economy’s current condition, has climbed 5.8 percent since reaching an almost four-month low on June 7.
The jobs report may help determine whether the Fed takes any new measures aimed at boosting growth or sticks to its outlook that the “extended period” of interest rates close to zero and a near-record $2.3 trillion balance sheet will eventually bring down unemployment.
“We have a considerable way to go to achieve a full recovery in our economy,” Bernanke said in a speech to southern U.S. state lawmakers in Charleston, South Carolina. Still, “rising demand from households and businesses should help sustain growth,” he said.
Fed’s Options
Options outlined by Bernanke last month include enhancing the low-rate commitment, reducing the 0.25 percent rate the Fed pays on banks’ reserve deposits and maintaining or expanding the amount of assets on the balance sheet. The policy-making Federal Open Market Committee next meets on Aug. 10.
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 Obama administration is facing public pessimism about the direction of the economy.
More than 7 out of 10 Americans say the economy is still mired in recession, and the country is conflicted over how to balance concerns over joblessness and the federal budget deficit, according to a Bloomberg National Poll.
Americans are torn about whether the federal government should focus on curbing spending or creating jobs, the poll conducted July 9-12 showed. Seven of 10 Americans say reducing unemployment is the priority. At the same time, the public is skeptical of the President Barack Obama’s stimulus program and wary of more spending, with more than half saying the deficit is “dangerously out of control.”
Support for Obama has fallen as the jobless rate has been slow to retreat. His job approval over a three-day period ending July 31 was 44 percent, compared with 54 percent at this time last year, according to a Gallup poll.
Bloomberg Survey
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Nonfarm Private Manu Unemploy
Payrolls Payrolls Payrolls Rate
,000’s ,000’s ,000’s %
==============================================================
Date of Release 08/06 08/06 08/06 08/06
Observation Period July July July July
--------------------------------------------------------------
Median -65 90 13 9.6%
Average -68 91 15 9.6%
High Forecast 10 150 45 9.7%
Low Forecast -160 20 0 9.3%
Number of Participants 84 54 24 83
Previous -125 83 9 9.5%
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4CAST Ltd. -70 85 25 9.6%
Action Economics -70 --- 10 9.6%
Aletti Gestielle SGR -110 80 5 9.5%
Ameriprise Financial Inc -30 100 5 9.6%
Banesto -60 --- --- ---Bank
of Tokyo- Mitsubishi -120 53 4 9.6%
Bantleon Bank AG -30 90 --- 9.6%
Barclays Capital -50 125 --- 9.5%
Bayerische Landesbank -75 --- --- 9.6%
BBVA -112 113 15 9.6%
BMO Capital Markets -60 --- --- 9.6%
BNP Paribas -50 --- --- 9.6%
BofA Merrill Lynch Resear -60 125 --- 9.7%
Briefing.com -100 70 --- 9.6%
Capital Economics -75 --- --- 9.6%
CIBC World Markets -70 --- --- 9.6%
Citi -50 100 --- 9.5%
ClearView Economics -100 100 5 9.6%
Commerzbank AG -50 100 --- 9.6%
Credit Agricole CIB -69 75 --- 9.6%
Credit Suisse -50 100 --- 9.5%
Daiwa Securities America -75 --- --- 9.3%
Danske Bank -70 80 --- 9.6%
DekaBank -50 90 --- 9.5%
Desjardins Group -20 --- --- 9.6%
Deutsche Bank Securities 10 150 --- 9.3%
Deutsche Postbank AG -100 --- --- 9.6%
DZ Bank -40 --- --- 9.6%
Exane -50 --- --- 9.6%
First Trust Advisors -55 100 15 9.5%
FTN Financial -65 80 --- 9.7%
Goldman, Sachs & Co. -75 75 --- 9.6%
Helaba -60 90 --- 9.6%
High Frequency Economics -75 100 --- 9.6%
HSBC Markets -55 100 --- 9.6%
Hugh Johnson Advisors 10 --- 10 9.6%
IDEAglobal -50 110 10 9.4%
IHS Global Insight -120 70 --- 9.6%
Informa Global Markets -80 --- 45 9.6%
ING Financial Markets -90 90 15 9.7%
Insight Economics 0 100 --- 9.7%
Intesa-SanPaulo -50 --- --- 9.5%
J.P. Morgan Chase -25 120 10 9.6%
Janney Montgomery Scott L -105 45 10 9.6%
Jefferies & Co. -50 120 20 9.6%
Landesbank Berlin -100 --- --- 9.7%
Landesbank BW -100 100 --- 9.6%
Maria Fiorini Ramirez Inc -65 90 --- 9.6%
MF Global -95 70 0 9.4%
MFC Global Investment Man -75 75 5 9.6%
Mizuho Securities -100 --- --- 9.6%
Moody’s Economy.com -45 100 30 9.6%
Morgan Keegan & Co. -125 --- --- 9.7%
Morgan Stanley & Co. -5 145 40 9.6%
National Bank Financial -10 --- --- 9.6%
Natixis -110 --- --- 9.6%
Nomura Securities Intl. -90 85 --- 9.5%
Paragon Research -110 20 --- 9.6%
Pierpont Securities LLC -75 90 --- 9.5%
PineBridge Investments -45 --- --- 9.6%
PNC Bank -100 --- 15 9.7%
Prestige Economics -75 --- --- 9.7%
Raymond James -65 85 --- 9.6%
RBC Capital Markets -40 --- --- 9.6%
RBS Securities Inc. -60 100 15 9.6%
Ried, Thunberg & Co. -60 --- --- 9.3%
Saxo Bank -30 100 --- 9.6%
Scotia Capital -40 --- --- 9.6%
Societe Generale 0 140 --- 9.5%
Standard Chartered -100 30 --- 9.7%
State Street Global Marke -60 111 15 9.4%
Stone & McCarthy Research -110 80 30 9.4%
TD Securities -160 45 --- 9.7%
Thomson Reuters/IFR -35 120 --- 9.6%
Tullett Prebon -90 60 --- 9.6%
UBS -55 100 --- 9.6%
UniCredit Research -75 --- --- 9.5%
Union Investment -115 --- --- 9.7%
University of Maryland -150 50 10 9.6%
Wells Fargo & Co. -25 120 --- 9.5%
WestLB AG -50 --- --- 9.6%
Westpac Banking Co. -140 90 --- 9.7%
Woodley Park Research -25 --- --- 9.6%
Wrightson Associates -60 85 --- 9.3%
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To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
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