Payrolls Probably Rose as U.S. Employers Looked Past Budget Cuts
Payrolls probably grew in February, a sign U.S. employers were undaunted by the budget impasse in Washington as sales rose, economists said before a report today.
An additional 165,000 workers were hired last month after a 157,000 increase in January, according to the median forecast of 90 economists surveyed by Bloomberg. The jobless rate held at 7.9 percent, the survey showed.
Automakers and construction companies are among those announcing plans to take on more staff, which will lead to gains in incomes that may help the world’s biggest economy weather federal cutbacks and higher taxes. Federal Reserve policy makers remain unsatisfied with the pace at which out-of-work Americans, now at 12.3 million, are finding employment, indicating they’ll keep adding stimulus to spur growth.
“The labor market is steady as she goes,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “Job growth is enough to keep the consumer moving ahead. These are modest gains, unsatisfying in terms of how much we need to claw back from the enormous hit we took during the recession, but they’re at least still in the right direction.”
Payroll estimates ranged from gains of 121,000 to 260,000 in the Bloomberg survey. The Labor Department will release the employment figures at 8:30 a.m. in Washington.
Private payrolls, which exclude government agencies from the count, rose by 173,000 in February after a 166,000 gain the prior month, the survey showed.
Forecasts for the unemployment rate ranged from 7.7 percent to 7.9 percent. Joblessness has been 7.8 percent or 7.9 percent since September.
‘Improving Gradually’
“Consistent with the moderate pace of economic growth, conditions in the labor market have been improving gradually,” Fed Chairman Ben S. Bernanke told lawmakers last week during his semiannual testimony on monetary policy. Central bank officials still want to see “substantial improvement in the outlook for the labor” and will thus continue to buy securities and keep interest rates low to stimulate the economy, he said.
The economy is creating jobs this year even with the fiscal constraints that started in January. Congress let the payroll tax funding Social Security revert to 6.2 percent from 4.2 percent, and boosted taxes on top income earners. The U.S. economy will also be tested by $85 billion in across-the-board budget cuts, known as sequestration, that began March 1 because lawmakers couldn’t agree on deficit reduction.
Shares Gains
Markets have also taken the effects of fiscal tightening in stride. The Standard & Poor’s 500 Index advanced 6.5 percent this year through last week, more than the MSCI All Country (MXWD) World Index’s 4.1 percent gain. The Dow Jones Industrial Average closed at a record-high on March 5, regaining losses resulting from the recession. It has continued climbing, closing at a new high of 14,329.49 yesterday.
A private report earlier this week showed businesses took on more workers than projected in February. Headcounts grew by 198,000 last month after a more-than-first estimated 215,000 addition in January, according to March 6 figures from the ADP Research Institute.
A recovery in house prices and a need to enlarge the supply of homes for sale has stirred construction activity. Home Depot Inc. (HD) said last month it plans to add more than 80,000 temporary employees ahead of its busiest season, about 14 percent more than a year ago, as the rebound spurs spending on remodeling and landscaping. Lowe’s Cos. said in January it would take on 45,000 seasonal workers, 13 percent more than a year earlier, and add 9,000 permanent employees.
Boosting Production
Chrysler Group LLC, the automaker majority owned by Fiat SpA (F), will invest about $374 million and add 1,250 positions at Indiana factories to boost output of eight- and nine-speed transmissions. Chief Executive Officer Sergio Marchionne disclosed the investment in February.
Deloitte LLP plans to boost its staff by 18,000 this year, Chief Executive Officer Joe Echevarria said during a Feb. 27 interview on “Bloomberg Surveillance.” The accounting firm is hiring to support long-term growth even with the political uncertainty from Washington, he said.
As federal government spending declines, “the private sector can more than step in if they’re incented to hire and grow,” he said.
Bloomberg Survey
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Nonfarm Private Manu Unemploy
Payrolls Payrolls Payrolls Rate
,000’s ,000’s ,000’s %
================================================================
Date of Release 03/08 03/08 03/08 03/08
Observation Period Feb. Feb. Feb. Feb.
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Median 165 170 9 7.9%
Average 166 175 8 7.9%
High Forecast 260 235 18 8.0%
Low Forecast 121 129 -3 7.7%
Number of Participants 90 55 26 85
Previous 157 166 4 7.9%
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4CAST 200 205 --- 7.8%
ABN Amro 150 160 --- 7.9%
Action Economics 155 165 5 7.9%
Ameriprise Financial 160 170 10 7.8%
Banca Aletti 183 211 8 7.9%
Bank of the West 150 159 0 7.9%
Bank of Tokyo-Mitsubishi 195 --- --- 7.8%
Banorte-IXE 150 --- --- 7.9%
Bantleon Bank AG 145 --- --- 7.9%
Barclays 150 155 --- 7.8%
Bayerische Landesbank 160 --- --- 7.9%
BBVA 152 161 --- 7.9%
BMO Capital Markets 180 --- --- 7.8%
BNP Paribas 160 --- --- 7.9%
BofA Merrill Lynch 160 165 --- 7.8%
Capital Economics 175 --- --- 7.9%
CIBC World Markets 158 --- --- 7.9%
Citi 150 150 10 7.8%
ClearView Economics 150 160 7 7.9%
CohnReznick 130 150 --- ---
Comerica 165 --- 5 7.9%
Commerzbank AG 165 175 --- 7.9%
Credit Agricole CIB 180 --- --- 7.8%
Credit Suisse 175 190 --- 7.8%
Daiwa Securities America 165 --- --- 7.9%
Danske Bank A/S 165 175 -3 7.9%
DekaBank 180 --- --- 7.8%
Desjardins Group 180 --- --- 7.9%
Deutsche Bank Securities 180 190 --- 7.7%
Deutsche Postbank AG 160 --- --- 7.9%
First Trust Advisors 210 217 10 7.8%
FTN Financial 130 140 --- 7.9%
Goldman, Sachs & Co. 150 --- --- 7.9%
Hammer Partners SA 150 --- --- 7.9%
Helaba 150 --- --- 7.9%
Herrmann Forecasting 181 176 13 7.8%
High Frequency Economics 130 --- --- 7.8%
HSBC Markets 179 182 9 7.9%
Hugh Johnson Advisors 168 167 10 7.8%
IDEAglobal 175 185 10 7.9%
IHS Global Insight 145 --- --- 7.9%
Informa Global Markets 145 --- 5 7.8%
ING Financial Markets 140 140 8 7.8%
Intesa Sanpaolo 185 --- --- 7.8%
J.P. Morgan Chase 165 170 10 7.9%
Janney Montgomery Scott 171 181 8 7.8%
Jefferies 175 182 10 7.9%
John Hancock Financial 172 --- --- 7.9%
Landesbank Berlin 150 --- --- 7.9%
Landesbank BW 190 --- --- 7.9%
LinkUp 260 --- --- ---
Lloyds Tsb Bank 175 180 --- 7.8%
Maria Fiorini Ramirez 155 165 --- ---
Market Securities 151 --- --- 7.8%
MET Capital Advisors 185 200 --- 7.9%
Modal Asset 180 187 --- ---
Moody’s Analytics 188 198 5 7.8%
Morgan Stanley & Co. 135 140 10 7.9%
National Bank Financial 150 --- --- 7.9%
Natixis 140 --- --- 7.9%
Nomura Securities 165 175 5 7.8%
Nord/LB 160 170 10 7.8%
OSK Group/DMG 170 --- --- 7.8%
Pantheon Macroeconomic 220 230 --- 7.9%
Paragon Research 205 --- --- 7.7%
Pierpont Securities 145 145 --- 7.9%
PineBridge Investments 125 --- --- 7.8%
PNC Bank 200 205 10 7.8%
Prestige Economics 175 185 --- 7.8%
Raiffeisenbank International 180 190 --- 7.8%
Raymond James 135 150 --- 7.9%
RBC Capital Markets 145 155 --- 7.8%
RBS Securities 160 165 --- 7.9%
Regions Financial 182 190 8 7.8%
Renaissance Macro Research 145 150 --- 7.9%
Santander 200 210 --- 7.9%
Scotiabank 175 --- --- 7.9%
SMBC Nikko Securities 150 170 --- 7.8%
Societe Generale 225 235 --- 7.7%
Southbay Research 185 190 --- ---
Southern Polytechnic State 121 129 --- 8.0%
Standard Chartered Bank 145 156 --- 7.9%
Stone & McCarthy Research 150 155 5 7.8%
TD Securities 175 185 --- 7.8%
UBS 190 200 --- 7.7%
UniCredit Research 175 --- --- 7.9%
University of Maryland 156 166 18 7.9%
Wells Fargo & Co. 191 --- --- 7.8%
Westpac Banking Co. 130 --- --- 7.9%
Wrightson ICAP 160 170 --- 7.8%
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To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Payrolls Rose as U.S. Employers Looked Past Budget Cuts
Automakers and construction companies are among those announcing plans to take on more staff, which will lead to gains in incomes that may help the world’s biggest economy weather federal cutbacks and higher taxes. Photographer Scott Eells/Bloomberg
Automakers and construction companies are among those announcing plans to take on more staff, which will lead to gains in incomes that may help the world’s biggest economy weather federal cutbacks and higher taxes. Photographer Scott Eells/Bloomberg
March 8 (Bloomberg) -- Federal Reserve Bank of St. Louis President James Bullard talks about the outlook for the U.S. labor market, the central bank's policy and the economy. He speaks with Tom Keene and Michael McKee on Bloomberg Television's "Surveillance." (Source: Bloomberg)
March 7 (Bloomberg) -- Matthew Ferguson, chief executive officer of Careerbuilder.com, talks about the performance of the U.S. labor market and growth outlook. Ferguson speaks with Deirdre Bolton on Bloomberg Television's "Market Makers." (Source: Bloomberg)
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