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U.S. Payroll Gain Probably Exceeded 200,000 for Fourth Month

Employers probably added more than 200,000 workers to payrolls in March for a fourth straight month as U.S. companies gained confidence sales will keep improving, economists said before a government report today.

Hiring increased by 205,000 after rising by 227,000 in February, according to the median projection of 80 economists surveyed by Bloomberg News. The last time employment advanced at a similar pace for as many months was late 1999 into 2000. The jobless rate probably held at a three-year low of 8.3 percent.

The pickup in jobs has propelled consumer sentiment to a four-year high, boosting the odds household spending, which accounts for 70 percent of the economy, will keep growing. At the same time, Federal Reserve Chairman Ben S. Bernanke last week said growth needs to accelerate to maintain the pace of hiring, one reason policy makers say interest rates will probably remain low at least through late 2014.

“The labor market’s improvement will help consumer spending,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We expect labor- market conditions to improve at a modest pace throughout the balance of the year.”

The Labor Department’s report is scheduled to be released at 8:30 a.m. in Washington. Payroll estimates in the Bloomberg survey ranged from increases of 175,000 to 250,000. Projections (USURTOT) for the jobless rate ranged from 8.1 percent to 8.4 percent.

Stock Futures

U.S. equity futures rose before the jobs figures, with the contract on the Standard & Poor’s 500 Index (SPA) expiring in June climbing 0.2 percent to 1,393.4 at 6:43 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 2.20 percent from 2.18 percent late yesterday.

Asian stocks fell for a third day as concern about Europe’s debt crisis weighed on confidence. The MSCI Asia Pacific Index (MXAP) retreated 0.4 percent.

While a 0.8 percentage-point drop in unemployment since August may underpin President Barack Obama’s standing leading up to the vote in November, only one president since World War II, Ronald Reagan, has been re-elected with a jobless rate above 6 percent. Reagan won a second term in 1984 with 7.2 percent unemployment in the month of the election, after the rate had fallen almost three percentage points in the previous 18 months.

The U.S. again may be emerging as a main engine for global growth as Europe slides into recession and China’s economy decelerates.

China Economy

China’s Premier Wen Jiabao cut this year’s growth target to 7.5 percent last month from an 8 percent goal in place since 2005 as officials seek to shift the economy toward more consumption. That’s down from last year’s 9.2 percent expansion.

Gross domestic product in the 17-nation euro area fell 0.3 percent (EUGNEMUQ) in the fourth quarter, the first contraction since 2009. Manufacturing shrank in March, and unemployment rose to 10.8 percent in February.

In the U.S., dismissals have subsided, suggesting companies may be more confident about the economic outlook. Applications for jobless claims averaged 361,800 over the past four weeks, the lowest level in four years. Five months ago they averaged 399,800, Labor Department data show.

Companies are forecast to expand payrolls by 215,000, after a 233,000 gain in February, according to the survey median. Factory payrolls for March are projected to rise by 20,000 after a 31,000 gain.

Adding Shifts

Strengthening demand is prompting companies like Ford Motor Co. (F), the second-biggest U.S. automaker, to bring in more workers. The Dearborn, Michigan-based manufacturer boosted its 2012 sales forecast to 14.5 million to 15 million vehicles from a previous projection of 13.5 million to 14.5 million.

“We’ve already announced some shift increases, some adds in terms of shifts this year,” Erich Merkle, sales analyst at Ford, said April 3 on a conference call with analysts. “So, certainly we’ll be adding some people to fill those shifts.”

Recent data showing the expansion will be sustained have also lifted share prices. The S&P 500 (SPX) advanced 12 percent during the first quarter, including a 3.1 percent increase in March. That marked the strongest three-month start to a year since a 13.5 percent advance in the first quarter of 1998.

The world’s largest economy expanded 1.7 percent in 2011, Commerce Department figures show. The U.S. is projected to grow 2.2 percent this year, according to the median estimate in a Bloomberg survey of 70 economists last month.

Gasoline Prices

Wage increases are needed to help Americans weather gasoline prices that have increased by 66 cents this year through April 4, to $3.94 a gallon, according to data from AAA, the nation’s largest auto club.

The improving labor market is helping ease the burden of fuel costs, as evidenced by stronger household sentiment. The Bloomberg Consumer Comfort Index (COMFCOMF) last week climbed to the highest level since 2008.

Bernanke, in a speech to economists on March 26, said the employment gains have been a “welcome development. Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks.”

“We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” Bernanke said, adding he was particularly concerned about the number people out of work for six months or longer.

The number of people unemployed for 27 weeks or more, as a percentage of all jobless, was 42.6 percent in February. That compares with 17.4 percent in December 2007, when the 18-month recession began.

                      Bloomberg Survey

================================================================
                           Nonfarm  Private Unemploy   Hourly
                          Payrolls Payrolls     Rate Earnings
                            ,000’s   ,000’s        %     MOM%
================================================================

Date of Release              04/06    04/06    04/06    04/06
Observation Period           March    March    March    March
----------------------------------------------------------------
Median                         205      215     8.3%     0.2%
Average                        208      220     8.3%     0.2%
High Forecast                  250      265     8.4%     0.2%
Low Forecast                   175      185     8.1%     0.1%
Number of Participants          80       45       76       49
Previous                       227      233     8.3%     0.1%
----------------------------------------------------------------
4CAST Ltd.                     200      215     8.2%     ---
ABN Amro Inc.                  210      230     8.3%     ---
Action Economics               210      215     8.3%     0.2%
Aletti Gestielle               200     ---      8.3%     ---
Ameriprise Financial Inc       215      210     8.2%     0.2%
Banca Aletti & C spa           230      246     8.2%     ---
Bank of Tokyo- Mitsubishi      200      210     8.2%     ---
Bantleon Bank AG               190     ---      8.3%     ---
Barclays Capital               200      215     8.2%     0.1%
BBVA                           200      210     8.3%     0.2%
BMO Capital Markets            190     ---      8.3%     0.2%
BNP Paribas                    210     ---      8.3%     0.1%
BofA Merrill Lynch Resear      220      225     8.3%     0.2%
Briefing.com                   230      250     8.2%     0.1%
Capital Economics              200     ---      8.3%     0.1%
CIBC World Markets             200     ---      8.3%     0.2%
Citi                           185     ---      8.3%     0.1%
ClearView Economics            190      205     8.4%     0.2%
Comerica Inc                   200     ---      8.2%     0.1%
Commerzbank AG                 220     ---      8.3%     0.2%
Credit Agricole CIB            210     ---      8.3%     0.2%
Credit Suisse                  235     ---      8.2%     0.2%
Daiwa Securities America       200     ---      8.3%     ---
Desjardins Group               210     ---      8.3%     0.2%
Deutsche Bank Securities       250      250     8.2%     0.1%
Deutsche Postbank AG           230     ---      8.2%     ---
Fact & Opinion Economics       240      250     8.2%     ---
First Trust Advisors           210      223     8.1%     0.2%
FTN Financial                  200      220     8.3%     0.1%
Goldman, Sachs & Co.           200     ---      8.2%     0.1%
HSBC Markets                   180      189     8.3%     ---
Hugh Johnson Advisors          180      185     8.3%     0.2%
IDEAglobal                     210      220     8.3%     0.2%
IHS Global Insight             210     ---      8.2%     0.2%
Informa Global Markets         200     ---      8.3%     0.2%
ING Financial Markets          220      230     8.1%     0.2%
Insight Economics              235     ---      8.2%     0.2%
Intesa Sanpaulo                190     ---      8.3%     0.2%
Iur Capital Llc                195     ---      8.2%     ---
J.P. Morgan Chase              215      220     8.3%     0.2%
Janney Montgomery Scott L      201      221     8.3%     ---
Jefferies & Co.                195      210     8.2%     0.1%
JH Cohn                        225     ---      ---      ---
Laurentian Bank Securitie      180      185     8.3%     0.1%
LCA Consultores                225     ---      ---      ---
Maria Fiorini Ramirez Inc      215      225     ---      ---
Market Securities              219     ---      8.2%     ---
MET Capital Advisors           222     ---      8.2%     ---
Mizuho Securities              175     ---      8.3%     ---
Moody’s Analytics              200      205     8.3%     0.1%
Morgan Stanley & Co.           175     ---      8.3%     0.2%
National Bank Financial        190     ---      8.3%     ---
Natixis                        205     ---      8.2%     0.2%
Newedge                        205      215     8.3%     ---
Nomura Securities Intl.        225      235     8.2%     0.2%
Nord/LB                        175     ---      8.3%     0.2%
OSK Group/DMG                  192     ---      8.2%     ---
O’Sullivan                     195      205     8.3%     0.1%
Paragon Research               242     ---      8.2%     ---
Parthenon Group                206      224     8.2%     0.2%
Pierpont Securities LLC        235      245     8.2%     ---
PineBridge Investments         245      265     8.2%     0.1%
PNC Bank                       200      210     8.3%     0.2%
Prestige Economics             200      205     8.3%     ---
Raiffeisenbank Internatio      240      245     8.2%     ---
RBC Capital Markets            200      205     8.3%     ---
RBS Securities Inc.            220      225     8.2%     ---
Scotia Capital                 220     ---      8.3%     ---
SMBC Nikko Securities          250      250     8.3%     0.2%
Societe Generale               190      195     8.1%     0.2%
Standard & Poor’s              225      230     ---      0.2%
Standard Chartered             205      215     8.3%     0.1%
Stone & McCarthy Research      200      210     8.2%     0.2%
TD Securities                  175      185     8.4%     ---
UBS                            200      210     8.2%     0.1%
University of Maryland         200      205     8.3%     0.2%
Wells Fargo & Co.              226     ---      8.2%     ---
WestLB AG                      220     ---      8.3%     0.1%
Westpac Banking Co.            180     ---      8.3%     ---
Wrightson ICAP                 230      235     8.2%     0.1%
================================================================

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net

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