Payroll Gains in U.S. Probably Cooled in October
Employers probably took on fewer workers in October, illustrating the “frustratingly slow” recovery that led Federal Reserve Chairman Ben S. Bernanke to say the U.S. central bank may need to take additional action, economists said before a report today.
Payrolls climbed by 95,000 following a 103,000 September increase, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate was 9.1 percent for a fourth consecutive month, the figures may show.
The crisis in Europe and looming deadline on U.S. budget talks may be prompting companies to hold back on concern failure to reach resolutions will put the global recovery at risk. Fed policy makers project the jobless rate won’t drop under 8 percent until 2013 at the earliest, one reason why Bernanke this week said more stimulus “remains on the table.”
“It’s painfully slow healing,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The outlook really hinges on improvement in hiring to support faster consumer spending. The odds favor another round of monetary easing.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 50,000 to 150,000.
Estimates in the Bloomberg survey for the unemployment rate ranged from 8.9 percent to 9.2 percent.
Elevated Unemployment
The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.
Private payrolls, which exclude government jobs, rose 125,000 after a gain of 137,000 in September, economists forecast the Labor Department figures will also show.
The projected gain in total employment would bring the average for July through October to 96,000, compared with 131,000 in the first six months of the year.
Sustained increases of around 150,000 a month are needed to bring unemployment down about half a percentage point over a year, according to Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Through September, the economy had recovered about 2.09 million of the 8.75 million jobs lost as a result of the 18- month recession that ended in June 2009.
Faster hiring would spur bigger gains in incomes and bolster confidence, helping cushion against declines in home prices and allowing households to sustain their spending. Purchases grew at a 2.4 percent annual rate in the third quarter and the economy expanded at a 2.5 percent pace, the Commerce Department reported last week.
Hiring and Firing
Retailers like Macy’s Inc. (M) are adding staff ahead of the holidays, while companies including Whirlpool Corp. (WHR) plan to cut workers, evidence of an uneven economic recovery.
Macy’s is among those betting last quarter’s gain in spending will be sustained during the November-December shopping season. The second-biggest U.S. department-store chain is stepping up hiring of mostly part-time employees by 4 percent for the period. Kohl’s Corp. (KSS), the fourth-largest U.S. department-store chain, plans to add more than 40,000 holiday workers, a 5 percent gain from 2010.
Whirlpool, the world’s largest maker of household appliances, said it planned to cut more than 5,000 jobs and trimmed its earnings forecast. The reductions will be primarily within North America and Europe and include the closure of the refrigeration manufacturing site in Fort Smith, Arkansas, by mid-2012.
‘Challenging’ Environment
“We are taking necessary actions to address a much more challenging global economic environment,” Chief Executive Officer Jeff Fettig said in a statement on Oct. 28.
Stocks tumbled earlier this week after Greek Prime Minister George Papandreou said he wanted to hold a referendum on Europe’s rescue plan. Shares rallied over the past two days as Greece moved closer to accepting a bailout and the European central bank unexpectedly cut rates. The Standard & Poor’s 500 Index climbed 1.9 percent yesterday to close at 1,261.15.
Fed policy makers, who refrained from taking additional steps to ease monetary policy at their meeting this week, said in a statement that there are “significant downside risks to the economic outlook.”
The central bank’s latest forecasts showed less optimism about the economy and employment. Policy makers project growth next year of 2.5 percent to 2.9 percent, with unemployment in the 8.5 percent to 8.7 percent range. Joblessness in 2013 is forecast at 7.8 percent to 8.2 percent.
Additional stimulus “remains on the table,” Bernanke said at a Nov. 2 press conference in Washington, declining to specify conditions that would prompt a move. “While we still expect that economic activity and labor market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow.”
Bloomberg Survey
==============================================================
Nonfarm Private Manu Unemploy
Payrolls Payrolls Payrolls Rate
,000’s ,000’s ,000’s %
==============================================================
Date of Release 11/04 11/04 11/04 11/04
Observation Period Oct. Oct. Oct. Oct.
--------------------------------------------------------------
Median 95 125 2 9.1%
Average 95 125 1 9.1%
High Forecast 150 175 15 9.2%
Low Forecast 50 75 -20 8.9%
Number of Participants 91 51 20 87
Previous 103 137 -13 9.1%
--------------------------------------------------------------
4CAST 50 75 --- 9.1%
ABN Amro 110 130 --- 9.1%
Action Economics 110 135 0 9.1%
Aletti Gestielle 98 125 --- 9.1%
Ameriprise Financial 100 120 2 9.0%
Banca Aletti 85 121 10 9.1%
Banesto 95 --- --- ---
Bank of Tokyo- Mitsubishi 110 140 --- 9.1%
Bantleon Bank AG 85 --- --- 9.1%
Barclays Capital 100 125 --- 9.1%
Bayerische Landesbank 85 --- --- 9.1%
BBVA 105 115 0 9.1%
BMO Capital Markets 70 --- --- 9.2%
BNP Paribas 100 --- --- 9.1%
BofA Merrill Lynch 100 115 --- 9.1%
Briefing.com 100 130 --- 9.2%
Capital Economics 75 --- --- 9.2%
CIBC World Markets 90 --- --- 9.2%
Citi 110 140 5 9.1%
ClearView Economics 90 120 -20 9.2%
Comerica 75 --- --- 9.1%
Commerzbank AG 100 125 --- 9.1%
Credit Agricole CIB 105 --- --- 9.1%
Credit Suisse 85 110 --- 9.1%
Daiwa Securities America 90 --- --- 9.1%
Danske Bank 90 110 --- 9.1%
DekaBank 110 --- --- 9.1%
Desjardins Group 75 --- --- 9.1%
Deutsche Bank Securities 150 175 --- 8.9%
Deutsche Postbank AG 100 --- --- 9.1%
DZ Bank 86 --- --- 9.1%
Exane 50 --- --- 9.2%
Fact & Opinion Economics 120 140 --- 9.0%
First Trust Advisors 110 135 -10 9.1%
FTN Financial 120 140 --- 9.1%
Goldman, Sachs & Co. 75 --- --- 9.1%
Helaba 100 --- --- 9.1%
High Frequency Economics 125 150 --- 9.1%
HSBC Markets 95 120 --- 9.1%
Hugh Johnson Advisors 125 150 0 9.1%
IDEAglobal 120 145 -5 9.1%
IHS Global Insight 75 --- --- 9.1%
Informa Global Markets 80 --- 5 ---
ING Financial Markets 110 140 5 9.1%
Insight Economics 100 --- --- 9.2%
Intesa-SanPaulo 125 --- --- 9.1%
Iur Capital 60 --- --- 9.0%
J.P. Morgan Chase 95 105 -5 9.1%
Janney Montgomery Scott 92 117 5 9.1%
Jefferies & Co. 100 135 10 9.0%
JH Cohn 130 140 --- ---
Landesbank Berlin 70 --- --- 9.2%
Landesbank BW 90 --- --- 9.1%
Laurentian Bank 85 110 --- 9.2%
LCA Consultores 59 --- --- ---
Maria Fiorini Ramirez 100 125 --- 9.1%
Market Securities 85 --- --- 9.0%
MET Capital Advisors 84 --- --- 9.1%
MF Global 75 100 0 9.1%
Mizuho Securities 125 --- --- 9.1%
Moody’s Analytics 100 120 --- 9.1%
Morgan Keegan & Co. 95 --- --- 9.1%
Morgan Stanley & Co. 125 --- --- 9.2%
National Bank Financial 80 --- --- 9.1%
Natixis 110 --- --- 9.1%
Nomura Securities 130 150 15 9.0%
Nord/LB 80 110 -10 9.1%
OSK Group/DMG 90 --- --- 9.1%
Parthenon Group 64 --- --- 9.0%
Pierpont Securities 110 130 --- 9.1%
PineBridge Investments 75 95 --- 9.0%
PNC Bank 75 100 --- 9.1%
Prestige Economics 80 115 --- 9.1%
Raiffeisenbank International 85 110 --- 9.2%
Raymond James 95 125 --- 9.1%
RBC Capital Markets 80 100 --- 9.1%
RBS Securities 95 --- --- 9.1%
Scotia Capital 90 --- --- 9.1%
SMBC Nikko Securities 105 130 --- 9.1%
Societe Generale 135 155 --- 8.9%
Standard Chartered 95 125 --- 9.1%
State Street Global Markets 126 137 2 9.0%
Stone & McCarthy Research 85 115 14 9.1%
TD Securities 105 130 --- 9.0%
UBS 95 110 --- 9.0%
Union Investment 80 --- --- 9.1%
University of Maryland 90 110 5 9.2%
Wells Fargo & Co. 85 --- --- 9.1%
WestLB AG 105 --- --- 9.1%
Westpac Banking Co. 65 --- --- 9.2%
Wrightson ICAP 90 125 --- 9.1%
==============================================================
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Payroll Gains in U.S. Probably Cooled
Daniel Acker/Bloomberg
Employee Shandrika Parker attaches a cover plate to the detergent drawer of a front-load Whirlpool Corp. washing machine at the company's operations plant in Clyde, Ohio, U.S. Whirlpool, the world’s largest maker of household appliances, said it planned to cut more than 5,000 jobs.
Employee Shandrika Parker attaches a cover plate to the detergent drawer of a front-load Whirlpool Corp. washing machine at the company's operations plant in Clyde, Ohio, U.S. Whirlpool, the world’s largest maker of household appliances, said it planned to cut more than 5,000 jobs. Photographer: Daniel Acker/Bloomberg
Nov. 4 (Bloomberg) -- Peter Dixon, global equities economist at Commerzbank AG in London, talks about the outlook for U.S. unemployment data. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Nov. 3 (Bloomberg) -- Mortimer Zuckerman, chairman and chief executive officer of Boston Properties Inc., discusses the European sovereign debt crisis, the U.S. economy and fiscal policy. Zuckerman speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Nov. 4 (Bloomberg) -- Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc, discusses the outlook for today's U.S. jobs report for October and the prospects for the economy. He speaks from Hong Kong with Linzie Janis on Bloomberg Television's "First Look." (Source: Bloomberg)
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