Less Hiring Probably Kept U.S. Jobless Rate Elevated in August

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Photographer: Sam Hodgson/Bloomberg

Job seekers are reflected in a mirror on the ceiling as they line up to register for an employment fair sponsored by National Career Fairs in San Diego.

Payrolls probably rose at a slower pace in August, keeping unemployment in the U.S. above 8 percent for a 43rd month, economists said before a report today.

An additional 130,000 workers were taken on last month following a 163,000 increase in July, according to the median forecast of 92 economists surveyed by Bloomberg. The jobless rate may have held at 8.3 percent, the survey showed.

Employers may be reluctant to expand headcounts as they face a global economic slowdown and the so-called fiscal cliff of automatic tax increases and government spending cuts. The damage inflicted by the lack of progress on jobs is the reason Federal Reserve Chairman Ben S. Bernanke last week made the case for further easing.

“Hiring will be held in check by the tremendous amount of uncertainty this year,” said Michael Moran, chief economist at Daiwa Capital Markets America Inc. in New York, whose payroll forecast matched the survey median. “The Fed will take some action to spur the economy, they’ll want to be visible.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey employment estimates ranged from increases of 70,000 to 185,000.

Private employment, which excludes government jobs, climbed 142,000 after rising 172,000 in July, economists forecast the report will show.

Photographer: Alex Garcia/Chicago Tribune/MCT via Getty Images

Employees at Google's 'Googleplex' headquarters in Mountain View, California. Close

Employees at Google's 'Googleplex' headquarters in Mountain View, California.

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Photographer: Alex Garcia/Chicago Tribune/MCT via Getty Images

Employees at Google's 'Googleplex' headquarters in Mountain View, California.

Reports yesterday helped ease concern the labor market was weakening further. The number of claims for jobless benefits last week dropped to a one-month low, according to figures from the Labor Department. Data from Roseland, New Jersey-based ADP Employer Services showed companies expanded payrolls by 201,000 workers last month.

Shares Surge

Stocks jumped yesterday on the reports and on news that policy makers at the European Central Bank agreed to an unlimited bond-purchase program as they try to regain control of interest rates in the euro area. The Standard & Poor’s 500 Index rose 2 percent to close at 1,432.12, the highest level since January 2008.

American Axle & Manufacturing Holdings Inc. (AXL), a maker of axles and crankshafts, is among companies looking to expand as the auto industry rebounds. The Detroit-based company plans to hire 400 to 500 workers at its Three Rivers, Michigan, factory over the next two years, David Tworek, a spokesman, said in an e-mail last month.

Others are looking to pull back. Mountain View, California- based Google Inc. (GOOG) said on Aug. 13 it will cut about 4,000 positions at its Motorola Mobility Holdings Inc. unit, with about one-third of the reductions coming in the U.S. Printer maker Lexmark International Inc. (LXK) on Aug. 28 announced plans to eliminate 1,700 jobs globally.

Recession’s Damage

Payroll gains slowed from an average 226,000 in the first quarter to 73,000 in the April to June period, before picking up in July. So far, it has taken the U.S. three years to recover about half, or 4 million, of the 8.8 million jobs lost as a result of the 18-month recession that ended in June 2009.

The unemployment rate, derived from a separate Labor Department survey of households, has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.

Bernanke in an Aug. 31 speech in Jackson Hole, Wyoming, cited “the daunting economic challenges” that confront the U.S. He also said the Fed will provide additional policy stimulus as needed to promote a stronger economic recovery.

“The stagnation of the labor market in particular is a grave concern,” he said. Persistently high unemployment “will wreak structural damage on our economy that could last for many years.”

Employment and the economy are central themes in the presidential campaign, with President Barack Obama and Republican challenger Mitt Romney each trying to convince voters they can best energize the expansion and create jobs.

                        Bloomberg Survey  ================================================================                            Nonfarm  Private     Manu Unemploy                           Payrolls Payrolls Payrolls     Rate                             ,000’s   ,000’s   ,000’s        % ================================================================ Date of Release              09/07    09/07    09/07    09/07 Observation Period            Aug.     Aug.     Aug.     Aug. ---------------------------------------------------------------- Median                         130      142       10     8.3% Average                        128      137        8     8.3% High Forecast                  185      192       20     8.4% Low Forecast                    70       80       -5     8.1% Number of Participants          92       52       27       88 Previous                       163      172       25     8.3% ---------------------------------------------------------------- 4CAST                          115      125     ---      8.2% ABN Amro                       150      160     ---      8.2% Action Economics               140      150        0     8.3% Aletti Gestielle               100     ---      ---      8.3% Ameriprise Financial           135      145        8     8.3% Banca Aletti                   132      144        5     8.2% Bank of the West               142      152        2     8.3% Bank of Tokyo-Mitsubishi       140      150     ---      8.2% Banorte-IXE                    115     ---      ---      8.3% Bantleon Bank AG               125     ---      ---      8.3% Barclays                       150      160     ---      8.2% Bayerische Landesbank          130     ---      ---      8.3% BBVA                           130      135       10     8.3% BMO Capital Markets            120     ---      ---      8.3% BNP Paribas                    125     ---      ---      8.3% BofA Merrill Lynch             110      100     ---      8.3% Briefing.com                   140      155     ---      8.2% Capital Economics              100     ---      ---      8.3% CIBC World Markets             148     ---      ---      8.2% Citi                           140     ---      ---      8.2% ClearView Economics            135      140       15     8.3% Comerica                       130     ---        15     8.3% Commerzbank AG                 140      150     ---      8.3% Credit Agricole CIB            145     ---      ---      8.3% Credit Suisse                  140      155     ---      8.3% CTI Capital                     92     ---      ---      --- Daiwa Securities America       130     ---      ---      8.3% DekaBank                       140     ---      ---      8.3% Desjardins Group               125     ---      ---      8.2% Deutsche Bank Securities       150      160     ---      8.2% Deutsche Postbank AG           140     ---      ---      8.3% DZ Bank                        100     ---      ---      8.3% Exane                          125     ---      ---      8.3% First Trust Advisors           130      130       10     8.3% FTN Financial                  105      114     ---      8.2% Goldman, Sachs & Co.           125     ---      ---      8.3% Helaba                         140     ---      ---      8.3% High Frequency Economics        95      105     ---      8.3% Horizon Investments            135     ---      ---      8.3% HSBC Markets                   135      144        5     8.3% Hugh Johnson Advisors           90       95       10     8.2% IDEAglobal                     150      165       20     8.3% IHS Global Insight             130     ---      ---      8.3% Informa Global Markets          90       95        5     8.3% ING Financial Markets          160      150       10     8.2% Intesa Sanpaulo                105     ---      ---      8.3% Iur Capital                    140     ---      ---      8.2% J.P. Morgan Chase              150      160        0     8.3% Janney Montgomery Scott        102      122       14     8.2% Jefferies & Co.                 70       85       10     8.2% JH Cohn                        100     ---      ---      --- John Hancock Financial         172     ---      ---      8.2% Landesbank Berlin              120     ---      ---      8.3% Landesbank BW                   90     ---      ---      8.3% Lloyds Bank                    110      115     ---      8.2% Maria Fiorini Ramirez          150      160     ---      --- Market Securities              118     ---      ---      8.3% Mizuho Securities              160     ---      ---      8.3% Modal Asset                   ---       178     ---      --- Moody’s Analytics              145      140       10     8.2% Morgan Stanley & Co.           125      135       -5     8.3% National Bank Financial         95      110     ---      8.3% Natixis                        120     ---      ---      8.2% Newedge                        140      155        7     8.2% Nomura Securities              110      115        5     8.3% Nord/LB                         90     ---         0     8.3% OSK Group/DMG                  125     ---      ---      8.3% Paragon Research               125     ---      ---      8.2% Pierpont Securities            120      115     ---      8.2% PineBridge Investments         175     ---      ---      8.2% PNC Bank                       135      145       10     8.2% Prestige Economics             135      150     ---      8.2% Raiffeisenbank International   145      155     ---      8.3% Raymond James                  140      150     ---      8.2% RBC Capital Markets            105      115     ---      8.3% RBS Securities                 125      130        5     8.2% Regions Financial              151      155        6     8.2% Renaissance Macro Research     105      115     ---      8.3% Scotiabank                     160     ---      ---      8.3% SISR                           182      192     ---      8.1% SMBC Nikko Securities          170      175     ---      8.2% Societe Generale                70       80     ---      8.3% Southern Polytechnic State     145     ---      ---      8.1% Standard Chartered             130      140     ---      8.3% Stone & McCarthy Research      135      145       10     8.2% TD Securities                  105      120       10     8.3% TrimTabs                       185     ---      ---      --- UBS                            135      125     ---      8.3% Union Investment               130     ---      ---      8.2% University of Maryland         129      138       10     8.3% Wells Fargo & Co.              112     ---      ---      8.3% Westpac Banking Co.             80     ---      ---      8.4% Wrightson ICAP                 120      130     ---      8.2% =============================================================== 

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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