Payrolls in U.S. Probably Increased in March as Demand Picked Up

Photographer: Jin Lee/Bloomberg

Job seekers wait in line to see recruiters at a job fair organized by United Career Fairs in New York. Private payrolls, which exclude government agencies from the count, expanded by 200,000 workers in March after a 246,000 increase in the prior month, the survey showed. Close

Job seekers wait in line to see recruiters at a job fair organized by United Career... Read More

Close
Open
Photographer: Jin Lee/Bloomberg

Job seekers wait in line to see recruiters at a job fair organized by United Career Fairs in New York. Private payrolls, which exclude government agencies from the count, expanded by 200,000 workers in March after a 246,000 increase in the prior month, the survey showed.

Payrolls probably increased in March and the U.S. jobless rate held at a four-year low as demand improved at the start of the year, economists said before a report today.

Employers hired a net 190,000 workers last month after taking on 236,000 in February, according to the median forecast of 87 economists surveyed by Bloomberg. The jobless rate held at 7.7 percent, the lowest since December 2008, the survey indicated. Separate data may show the trade deficit was little changed in February.

Gains in hiring on the heels of a stronger housing market, a pickup in consumer spending and more corporate investment will help bolster the economy as federal budget cuts take hold. Federal Reserve policy makers, while acknowledging the labor market has improved, have said they want to see more progress before tapering record accommodative monetary stimulus.

“What you see is remarkable stability in job growth,” said John Ryding, chief economist and co-founder of RDQ Economics in New York. “We are in an OK place in terms of the pace at which we’re growing.”

The Labor Department will release the figures at 8:30 a.m. in Washington. Estimates for payrolls ranged from gains of 100,000 to 366,000 in the Bloomberg survey.

Photographer: Eddie Seal/Bloomberg

Job seekers fill out applications at a job fair sponsored by Job News in partnership with USOilWorker.com and The Texas Veterans Commission at the Norris Conference Center in San Antonio, Texas. Close

Job seekers fill out applications at a job fair sponsored by Job News in partnership... Read More

Close
Open
Photographer: Eddie Seal/Bloomberg

Job seekers fill out applications at a job fair sponsored by Job News in partnership with USOilWorker.com and The Texas Veterans Commission at the Norris Conference Center in San Antonio, Texas.

Projections for the unemployment rate ranged from 7.6 percent to 7.8 percent.

February Report

Five minutes after the agency’s March 8 report showed February payrolls exceeded the 166,000 average forecast, the contract on the Standard & Poor’s 500 Index expiring in June increased 0.03 percent. The dollar rose 0.15 percent against the euro. The difference between the actual figure and the average estimate of economists surveyed by Bloomberg was 3 times larger the poll’s standard deviation, or the average divergence between what each economist forecast and the mean.

Private payrolls, which exclude government agencies from the count, expanded by 200,000 workers in March after a 246,000 increase in the prior month, the survey showed.

A report earlier this week prompted some economists to mark down estimates for March job growth. Headcounts at private employers grew by 158,000 last month after a 237,000 gain in February, according to April 3 figures from the ADP Research Institute.

Budget Cuts

Payroll growth in today’s Labor Department report is projected to show the job market kept making progress even as $85 billion in automatic government budget cuts, known as sequestration, started March 1, threatening to slow the U.S. economy. The reductions in planned spending, which began because Congress couldn’t compromise on a debt-reduction strategy, trim 5 percent from domestic agencies and 8 percent for the Defense Department this fiscal year.

Even so, consumer and corporate demand has given companies reason to keep expanding. Americans have coped with a 2 percentage-point increase in payroll taxes and a jump in gasoline prices earlier this year. In February, household purchases climbed the most in five months.

Additionally, a healthier real-estate market has created the need for more construction jobs. In the nine months ended February, employment in that industry climbed by 169,000. The 48,000 gain in February was the biggest in almost six years.

Housing’s rebound has prompted businesses like Winnebago Industries Inc. (WGO) to boost output. The Forest City, Iowa-based maker of motor homes increased daily production 24 percent during its fiscal second quarter compared with the prior three months, partly by adding staff, according to Chief Financial Officer Sarah Nielsen.

Adding Workers

“The lines are completely filled and running, and we’ve been hiring,” Nielsen said during a March 28 earnings call. “Our headcount at this juncture is a little bit under where we need to, but we’ve been keeping up for the most part.” The company has been adding about 20 people a week on a consistent basis, she said.

Paul Dales, senior U.S. economist at Capital Economics Ltd in London, said in a March 28 note that the effect of sequestration in the March employment figures may be difficult to gauge because, instead of firing employees, most government agencies have asked workers to take unpaid leave.

The Labor Department counts someone as employed if they worked for any amount of time in the pay period, regardless of number of hours worked. Economists at Goldman Sachs Group Inc. wrote in an April 3 note that the budget cuts could reduce payrolls by 10,000.

Market Reaction

Investors have looked beyond the risks to the economy from fiscal tightening. The Standard & Poor’s 500 Index climbed to a record this week.

Fed officials are waiting for sustained signs of job-market resilience before winding down their $85 billion of monthly bond purchases. Central bank policy makers reiterated in a March 20 statement that they would continue to buy securities until the labor market outlook improves “substantially.” Each month the Fed is purchasing Treasuries and mortgage bonds to keep interest rates low, spur economic growth and reduce unemployment.

Also today, the trade deficit was probably little changed at $44.6 billion in February compared with $44.4 billion the prior month, Commerce Department data are projected to show at 8:30 a.m.

                        Bloomberg Survey

================================================================
                             Trade  Nonfarm  Private Unemploy
                           Balance Payrolls Payrolls     Rate
                            $ Blns   ,000’s   ,000’s        %
================================================================

Date of Release              04/05    04/05    04/05    04/05
Observation Period            Feb.    March    March    March
----------------------------------------------------------------
Median                       -44.6      190      200     7.7%
Average                      -44.5      190      199     7.7%
High Forecast                -41.2      366      260     7.8%
Low Forecast                 -47.0      100      115     7.6%
Number of Participants          66       87       54       82
Previous                     -44.4      236      246     7.7%
----------------------------------------------------------------
4CAST                        -44.6      200      225     7.8%
ABN Amro                      ---      ---      ---      7.7%
Action Economics             -47.0      185      200     7.7%
Ameriprise Financial         -45.0      195      205     7.7%
Banca Aletti                 -41.9      214      242     7.7%
Bank of the West             -47.0      200      205     7.7%
Bank of Tokyo-Mitsubishi     -45.0      200     ---      7.6%
Banorte-IXE                   ---       205     ---      7.7%
Bantleon Bank AG              ---       195     ---      7.7%
Barclays                     -45.0      175      190     7.6%
Bayerische Landesbank         ---       180     ---      7.7%
BBVA                         -44.6      198      201     7.7%
BMO Capital Markets          -46.0      155      170     7.7%
BNP Paribas                  -46.0      160      180     7.7%
BofA Merrill Lynch           -44.8      200      215     7.8%
Capital Economics            -45.0      200     ---      7.7%
CIBC World Markets           -44.8      195     ---      7.7%
Citi                         -44.0      175      180     7.7%
ClearView Economics          -44.0      200      210     7.6%
CohnReznick                   ---       235      250     ---
Comerica                     -44.0      190     ---      7.6%
Commerzbank AG               -44.0      190      210     7.7%
Credit Agricole CIB          -45.0      190     ---      7.8%
Credit Suisse                -47.0      160      175     7.7%
CTI Capital                   ---       186     ---      ---
Daiwa Securities America     -45.5      200     ---      7.7%
Danske Bank A/S               ---       210      215     7.7%
DekaBank                      ---       200     ---      7.6%
Desjardins Group             -45.4      140     ---      7.8%
Deutsche Bank Securities     -45.0      160      170     7.7%
Deutsche Postbank AG         -45.5      180     ---      7.7%
Fact & Opinion Economics     -45.0      180      185     7.8%
First Trust Advisors         -45.0      190      200     7.7%
FTN Financial                -44.5      195      205     7.7%
Goldman, Sachs & Co.         -44.4      175     ---      7.7%
Helaba                       -44.0      175     ---      7.7%
High Frequency Economics     -43.0      160      165     7.7%
HSBC Markets                 -43.9      174      175     7.7%
Hugh Johnson Advisors        -44.6      170      185     7.7%
IDEAglobal                   -43.0      225      240     7.7%
IHS Global Insight           -45.4      180     ---      7.7%
Informa Global Markets       -44.2      180     ---      7.7%
ING Financial Markets        -44.0      180      190     7.6%
Intesa Sanpaolo              -44.8      200     ---      7.7%
J.P. Morgan Chase            -45.1      210      215     7.8%
Janney Montgomery Scott      -41.2      180      190     7.6%
Jefferies                    -43.8      200      220     7.6%
John Hancock Financial        ---       202     ---      7.8%
Landesbank Berlin            -44.0      150     ---      7.8%
Landesbank BW                -42.0      200     ---      7.7%
LinkUp                        ---       366     ---      ---
Lloyds Tsb Bank              -43.0      200      209     7.7%
Maria Fiorini Ramirez         ---       210      220     ---
Market Securities            -45.1      188     ---      7.6%
MET Capital Advisors          ---       195      180     7.6%
Mizuho Securities             ---       175     ---      7.8%
Modal Asset                   ---       126      126     ---
Moody’s Analytics            -42.4      175      185     7.8%
National Bank Financial      -45.0      150     ---      7.7%
Natixis                      -44.9      200     ---      7.7%
Nomura Securities            -44.0      170      180     7.6%
Nord/LB                      -45.5      200     ---      7.7%
OSK Group/DMG                 ---       190     ---      7.7%
Oxford Economics              ---       175     ---      7.7%
Paragon Research              ---       142     ---      7.7%
Pierpont Securities          -43.6      210      220     7.7%
PNC Bank                     -46.0      190      200     7.7%
Prestige Economics            ---       215      225     7.7%
Raiffeisenbank International -44.5      205      220     7.7%
Raymond James                -46.0      175      190     7.8%
RBC Capital Markets          -44.0      200      205     7.7%
RBS Securities               -44.5      195      205     7.7%
Renaissance Macro Research   -44.5      180      185     7.8%
Santander                     ---       250      260     7.7%
Scotiabank                   -43.0      210     ---      7.6%
SISR                          ---       198      215     7.7%
SMBC Nikko Securities        -46.0      190      200     7.6%
Societe Generale             -46.1      230      240     7.7%
Southbay Research             ---       195      200     ---
Southern Polytechnic State    ---       100      115     7.8%
Standard Chartered Bank      -44.5      205      220     7.7%
Stone & McCarthy             -43.2      150      160     7.6%
TD Securities                -43.5      195      205     7.7%
UBS                          -42.5      190      200     7.6%
University of Maryland       -43.7      180      190     7.7%
Wells Fargo & Co.            -45.1      185     ---      7.7%
Westpac Banking Co.          -44.0      200     ---      7.8%
Wrightson ICAP               -45.0      190      200     7.8%
================================================================

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.