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
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Nonfarm Private Unemploy Hourly
Payrolls Payrolls Rate Earnings
,000’s ,000’s % MOM%
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Date of Release 04/06 04/06 04/06 04/06
Observation Period March March March March
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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%
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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
Jobs Report
Mark Lennihan/AP Photo
A job fair on March 28, 2012 at the Intrepid Sea, Air and Space Museum in New York.
A job fair on March 28, 2012 at the Intrepid Sea, Air and Space Museum in New York. Photographer: Mark Lennihan/AP Photo
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