U.S. Payrolls Probably Picked Up
Hiring in the U.S. probably picked up in April after the smallest gain in five months, showing the labor market may be regaining momentum, economists said before a report today.
Payrolls climbed by 160,000 workers following a 120,000 March increase, according to the median forecast of 85 economists surveyed by Bloomberg News. The jobless rate held at a three-year low of 8.2 percent, the figures may show.
The increase would leave the labor market 5 million jobs short of the 8.8 million lost as a result of the 18-month recession that ended almost three years ago. While some companies like Chrysler Group LLC are adding workers, Federal Reserve policy makers still view unemployment as “elevated” and plan to hold borrowing costs low through late 2014.
“We’re seeing a moderate pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St Petersburg, Florida. “The improvement will help fuel consumer spending to some extent. It’s still not fast enough to reduce the unemployment rate a lot or to quickly make up for the ground lost on employment during the recession.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 89,000 to 210,000.
The jobs data come six months before Americans head to the polls to either re-elect President Barack Obama or choose Republican Mitt Romney, who has said White House policies have done little to help U.S. workers.
Today’s Labor Department report may show private payrolls, which exclude government jobs, climbed 165,000 after rising 121,000 in March, economists forecast.
2012 Average
The projected gain in total payrolls for April would bring the average for this year to 199,000, compared with 206,750 in the first four months of 2011.
Estimates for the jobless rate, derived from a separate survey of households, ranged from 8.1 percent to 8.3 percent. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.
Faster economic growth would help lay the groundwork for more hiring. The economy expanded at a 2.2 percent annual rate in the first quarter after a 3 percent pace the prior three months, the Commerce Department reported last week. Consumer spending grew 2.9 percent, the most in more than a year.
Stocks have gained this year on signs the economy will keep expanding while Europe struggles with recession and Asia cools. The Standard & Poor’s 500 Index has climbed 11 percent so far in 2012.
Chrysler Hiring
Chrysler, the automaker controlled by Fiat SpA, said it will accelerate the addition of 1,100 jobs and a third crew of workers by hiring them in November, pulling ahead plans for increasing production in early 2013. Earlier this week, it also said four plants will skip normally scheduled two-week midyear shutdowns to meet increased demand.
Chrysler led the five largest automakers by U.S. sales in exceeding analysts’ estimates for April, reporting a 20 percent jump. Chrysler, Ford Motor Co. and Hyundai Motor Co. this week said they will add shifts at factories this year. General Motors Co. (GM), the top-selling automaker in the U.S., raised its forecast for full-year U.S. light-vehicle sales.
“Over time, we believe that strength in the manufacturing sector and strong retail sales will continue to lead to more job creation,” Don Johnson, vice president of U.S. sales at GM, said on a May 1 conference call with analysts. “That’s going to help more consumers put the recession behind them, gaining even more confidence and drive vehicle sales higher.”
Global Economy
The improvement in the U.S. contrasts with some of the other major economies. Joblessness in the 17-nation euro area increased to 10.9 percent in March, the highest since April 1997, from 10.8 percent a month earlier, data showed this week. United Parcel Service Inc. (UPS), the world’s largest package-delivery company, is among firms taking note.
“During the quarter, the most positive news has come from the U.S. where indications of economic rebound are evident,” Scott Davis, chief executive officer of UPS, said on an April 26 conference call. “Retail sales have grown faster than expected and the employment environment has improved. On the other hand, economies in other parts of the world continue to face challenges.”
Job Cuts
At the same time, cost-cutting is prompting cuts at some companies. H&R Block Inc. (HRB), the biggest U.S. tax preparer, plans to reduce 350 jobs and close about 200 company-owned offices. AMR Corp.’s American Airlines this month said it will eliminate 1,200 airport agent, baggage and cargo jobs as part of a bankruptcy restructuring plan to trim annual labor spending.
“Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated,” Fed policy makers said in an April 25 statement. The group “expects economic growth to remain moderate over coming quarters and then to pick up gradually,” and “anticipates that the unemployment rate will decline gradually.”
The central bankers last month repeated their plan to hold borrowing costs low through late 2014 to spur growth.
Fed officials also cut forecasts for the jobless rate, to an average 7.8 percent to 8 percent in the fourth quarter from a January projection of 8.2 percent to 8.5 percent, according to central tendency estimates released April 25.
Bloomberg Survey
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Nonfarm Private Unemploy
Payrolls Payrolls Rate
,000’s ,000’s %
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Date of Release 05/04 05/04 05/04
Observation Period April April April
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Median 160 165 8.2%
Average 158 166 8.2%
High Forecast 210 209 8.3%
Low Forecast 89 105 8.1%
Number of Participants 85 44 83
Previous 120 121 8.2%
----------------------------------------------------------------
4CAST 190 190 8.3%
ABN Amro 155 160 8.2%
Action Economics 180 180 8.2%
Aletti Gestielle 170 --- 8.2%
Ameriprise Financial 140 145 8.2%
Banca Aletti 190 189 8.3%
Bank of Tokyo-Mitsubishi 150 150 8.1%
Bantleon Bank AG 160 --- 8.2%
Barclays Capital 150 160 8.2%
Bayerische Landesbank 155 --- 8.2%
BBVA 150 165 8.2%
BMO Capital Markets 160 --- 8.2%
BNP Paribas 125 130 8.3%
BofA Merrill Lynch 155 155 8.3%
Briefing.com 140 145 8.2%
Capital Economics 175 --- 8.2%
CIBC World Markets 160 --- 8.2%
Citi 145 155 8.2%
ClearView Economics 180 190 8.3%
Commerzbank AG 180 --- 8.2%
Credit Agricole CIB 130 --- 8.2%
Credit Suisse 150 155 8.2%
Daiwa Securities America 175 --- 8.2%
Danske Bank 170 170 8.2%
DekaBank 160 --- 8.1%
Desjardins Group 170 --- 8.2%
Deutsche Bank Securities 175 175 8.1%
Deutsche Postbank AG 200 --- 8.2%
DZ Bank 150 --- 8.2%
Exane 150 --- 8.2%
Fact & Opinion Economics 180 185 8.2%
First Trust Advisors 145 155 8.1%
FTN Financial 100 --- 8.2%
Goldman, Sachs & Co. 125 --- 8.2%
Helaba 200 --- 8.2%
High Frequency Economics 125 --- 8.1%
HSBC Markets 170 167 8.2%
IDEAglobal 175 185 8.2%
IHS Global Insight 165 --- 8.3%
Informa Global Markets 165 --- 8.2%
ING Financial Markets 210 190 8.2%
Insight Economics 195 --- 8.2%
Intesa Sanpaulo 140 --- 8.2%
Iur Capital 95 --- 8.2%
J.P. Morgan Chase 145 150 8.2%
Janney Montgomery Scott 155 165 8.1%
Jefferies & Co. 175 180 8.1%
Landesbank Berlin 175 --- 8.2%
Landesbank BW 150 --- 8.2%
Maria Fiorini Ramirez 150 155 ---
Market Securities 115 --- 8.2%
MET Capital Advisors 120 --- 8.3%
Mizuho Securities 175 --- 8.2%
Modal Asset --- 162 ---
Moody’s Analytics 125 130 8.1%
Morgan Stanley & Co. 130 --- 8.2%
National Bank Financial 140 --- 8.2%
Natixis 110 --- 8.2%
Nomura Securities 195 200 8.2%
Nord/LB 160 --- 8.2%
OSK Group/DMG 190 --- 8.2%
O’Sullivan 125 135 8.2%
Paragon Research 140 --- 8.2%
Parthenon Group 203 209 8.1%
Pierpont Securities 190 195 8.2%
PineBridge Investments 175 --- 8.2%
PNC Bank 175 --- 8.2%
Prestige Economics 155 157 8.2%
Raiffeisenbank International 155 155 8.1%
Raymond James 160 165 8.1%
RBC Capital Markets 160 160 8.2%
RBS Securities 195 200 8.2%
Scotia Capital 150 --- 8.3%
SMBC Nikko Securities 150 150 8.2%
Societe Generale 105 105 8.1%
Southern Polytechnic State 89 --- ---
Standard Chartered 130 134 8.2%
Stone & McCarthy Research 160 170 8.1%
TD Securities 185 185 8.2%
UBS 170 180 8.1%
UniCredit Research 180 --- 8.3%
University of Maryland 175 180 8.2%
Wells Fargo & Co. 159 --- 8.2%
WestLB AG 180 --- 8.2%
Westpac Banking Co. 130 --- 8.3%
Wrightson ICAP 185 185 8.2%
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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
Payrolls in U.S. Probably Picked Up From Weakest in Five Months
Daniel Acker/Bloomberg
A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois.
A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois. Photographer: Daniel Acker/Bloomberg
May 4 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group Inc., talks about the U.S. economy and the April employment report. He speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "InsideTrack." James Tisch, chief executive officer of Loews Corp., also speaks. (Source: Bloomberg)
May 3 (Bloomberg) -- Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., talks about the outlook for the U.S. labor market and economy. Feroli speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)
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