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

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