Employers in U.S. Probably Added Most Workers in Five Months

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Job seekers look over business cards before entering a job fair hosted by JobExpo.com in Dallas, Texas, U.S. Close

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Photographer: Ben Torres/Bloomberg

Job seekers look over business cards before entering a job fair hosted by JobExpo.com in Dallas, Texas, U.S.

Employers in the U.S. probably boosted headcounts in April by the most in five months as companies grew confident the economy will snap back from a first-quarter slowdown, economists project a report will show today.

Payrolls rose by 218,000 last month after a 192,000 gain in March, according to the median forecast of 94 economists surveyed by Bloomberg. The jobless rate may have dropped to 6.6 percent, matching January as the lowest since October 2008.

Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor Co. are adding more workers. Faster payroll growth would corroborate the Federal Reserve’s view that the expansion is perking up after stalling last quarter.

“We’re seeing this continued improvement,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. Fed officials “knew that there was going to be a slowdown in the first quarter, but I think they’re looking ahead to say employment seems to be continuing to improve, and that’s what they’re really focused on.”

Payroll estimates in the Bloomberg survey before the Labor Department’s report at 8:30 a.m. in Washington ranged from increases of 155,000 to 292,000.

Last year, the U.S. added more than 194,000 jobs each month, compared with about 186,000 in 2012. Economists surveyed by Bloomberg on April 4-9 project payroll gains to match those from 2013.

Weather Rebound

Monthly U.S. Jobs Report: A Story Told by Numbers

A pickup in April employment would follow data this week showing consumers and companies were shaking off winter doldrums.

Household purchases, which account for about 70 percent of the economy, climbed 0.9 percent in March, the most since August 2009, the Commerce Department said yesterday. Incomes increased by the most in seven months.

Also yesterday, data from the Institute for Supply Management showed factories added employees in April at the fastest pace in four months. Manufacturing expanded the most this year.

Such optimism extends to Ford. Boosted by record profits in North America, the second-largest automaker said it will probably hire more than the 12,000 new workers it promised in its 2011 contract with the United Auto Workers.

“The business has grown faster than we predicted it would in 2011,” Joe Hinrichs, Ford’s president of the Americas, said in an interview on April 30. The company said it hired 2,000 new workers at its factory in Claycomo, Missouri, and that it’s completed about 75 percent of its commitment to hire 12,000 workers by 2015.

Disposable Income

Choice Hotels International, Inc. (CHH) said employment growth is one reason to be upbeat about the travel industry.

“As we’ve seen employment improve -- and I’m the first one to say it hasn’t moved that much yet, but it’s starting to feel like it is -- that’s going to give us an exaggerated impact based on those folks coming back with jobs and then beginning to travel,” Chief Executive Officer Stephen Joyce said on an April 28 earnings call. “We’re optimistic of that.”

The labor market is far from robust. More than two-thirds of the gauges on Fed Chair Janet Yellen’s labor market dashboard are still short of their pre-recession levels. Only payroll growth and layoffs are back to where they were leading up to the last contraction, while measures including the share of long-term unemployed and labor force participation haven’t returned to 2004-07 averages.

Those out of work 27 weeks or longer make up 35.8 percent of all jobless Americans, almost twice the pre-recession average of 19.1 percent. The figure reached a record-high 45.3 percent in April 2010.

Less Participation

Limited job prospects may be discouraging some Americans from seeking work, while retiring baby boomers also leave the labor force. The labor participation rate stands at 63.2 percent, close to a 35-year low of 62.8 percent reached in December and October.

“There’s still a fair amount of labor slack out there, which is the main reason why I think the Fed will continue to stress it’s keeping interest rates low for a considerable period of time,” Credit Agricole CIB’s Carey said. Carey projects the central bank will raise rates in the second half of 2015.

Policy makers at this week’s meeting said the economy is showing signs of picking up and the job market is improving. The Fed’s Open Market Committee pared its monthly asset-buying to $45 billion, its fourth straight $10 billion cut, and said further reductions in “measured steps” are likely.

Gross domestic product rose at a 0.1 percent annualized rate from January through March, compared with a 2.6 percent gain in the prior quarter, the Commerce Department said earlier this week.

“Growth in economic activity has picked up recently, after having slowed sharply,” the Fed said this week in a statement following their meeting in Washington. “Household spending appears to be rising more quickly.”

To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net

Bloomberg Survey ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== Date of Release 05/02 05/02 05/02 05/02 Observation April April April April ---------------------------------------------------- Median 218 8 6.6% 0.2% Average 216 8 6.6% 0.2% High Forecast 292 15 6.8% 0.3% Low Forecast 155 0 6.5% 0.0% # of replies 94 27 86 52 Previous 192 -1 6.7% 0.0% ---------------------------------------------------- ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== 4CAST 220 --- 6.6% 0.2% ABN Amro 225 --- 6.6% --- Action Economics 200 5 6.6% 0.2% Ameriprise 210 5 6.6% 0.3% Banca Aletti 195 5 6.6% --- Bank of the West 202 5 6.6% 0.2% Bank of Tokyo 220 --- 6.5% --- Bankrate 210 --- --- --- Banorte-IXE 203 --- 6.6% --- Bantleon Bank AG 225 --- 6.6% --- Barclays 250 --- 6.6% 0.2% Bayerische LB 220 --- 6.6% --- BBVA 210 6 6.7% 0.1% Berliner Sparkasse 225 --- 6.7% 0.2% BMO Capital 200 --- 6.6% 0.2% BNP Paribas 215 --- 6.7% 0.0% ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== BofA Merrill Lynch 215 --- 6.6% 0.2% Capital Economics 230 --- 6.6% 0.2% CIBC World Markets 234 --- 6.6% 0.3% Citi 225 15 6.6% 0.3% CohnReznick 225 --- --- --- Comerica 200 --- 6.6% --- Commerzbank AG 200 --- 6.6% --- Corporate Knights --- --- 6.6% --- Credit Agricole 215 --- 6.6% 0.2% Credit Suisse 200 --- 6.6% 0.2% CTI Capital 224 --- --- --- Daiwa Securities 200 --- 6.6% --- Danske Bank A/S 220 8 6.6% --- DekaBank 215 --- 6.6% 0.3% Desjardins Group 235 --- 6.6% 0.2% Deutsche Bank 240 --- 6.5% 0.2% ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== DZ Bank 210 --- 6.5% --- Fathom Financial 250 --- --- --- First Trust 231 8 6.6% 0.2% FTN Financial 230 --- 6.7% 0.2% Goldman, Sachs 220 --- 6.6% 0.2% Haitong 215 3 6.6% 0.2% Heartland 220 --- 6.6% --- Helaba 200 --- 6.6% 0.2% High Frequency 185 --- 6.6% 0.2% HSBC Markets 195 7 6.7% --- Hugh Johnson 185 5 6.6% 0.2% IDEAglobal 225 10 6.6% 0.2% IHS Global 196 --- 6.7% 0.2% Informa 250 15 6.7% 0.1% ING 220 15 6.6% 0.2% Intesa Sanpaolo 210 --- 6.6% 0.2% ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== Itau Asset Mgmt 230 --- --- --- J.P. Morgan Chase 220 15 6.6% 0.2% Janney Montgomery 192 8 6.6% --- Jefferies 230 10 6.6% 0.2% JP Morgan Asset 231 --- 6.6% 0.2% Landesbank BW 230 --- 6.6% --- LinkUp 292 --- --- --- Lloyds 220 10 6.6% 0.3% Maria Fiorini 205 --- --- --- Market Securities 215 --- 6.6% --- MET Capital 204 --- 6.7% --- Mizuho Securities 175 --- 6.7% --- Moody’s Analytics 225 5 6.6% 0.2% Morgan Stanley 250 15 6.6% 0.2% National Bank Finl 210 --- 6.6% --- Nationwide 225 --- 6.6% --- ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== Natixis 210 --- 6.6% 0.2% Nomura 225 10 6.6% --- Nord/LB 195 0 6.6% 0.2% OSK-DMG 201 --- 6.6% --- Oxford Economics 210 --- 6.6% --- Pantheon 200 --- 6.6% 0.2% Paragon Research 225 --- 6.6% --- Pierpont Securities 210 --- 6.6% --- PineBridge 225 --- 6.7% 0.3% PNC Bank 200 10 6.6% 0.2% Prestige Economics 205 --- 6.5% --- Raiffeisenbank 225 --- 6.6% --- Raymond James 225 --- 6.6% 0.2% RBC Capital 205 --- 6.6% --- RBS Securities 230 --- 6.7% 0.2% Regions Financial 241 12 6.5% 0.2% ==================================================== 5/1/2014 Nonfarm Manu Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ==================================================== Scotiabank 250 --- 6.5% --- Societe Generale 220 --- 6.6% 0.3% Southbay Research 248 --- --- --- Southern Polytech 155 --- 6.6% --- Standard Chartered 210 --- 6.6% 0.2% Sterne Agee 175 --- 6.8% 0.2% Stone McCarthy 250 8 6.6% 0.2% TD Securities 227 5 6.6% 0.2% TrimTabs 242 --- --- --- UBS 180 --- 6.6% 0.2% UniCredit 205 --- 6.7% --- University of MD 204 5 6.6% 0.2% Wells Fargo & Co 225 --- 6.7% --- Westpac Banking 190 --- 6.6% --- Wrightson ICAP 200 --- 6.6% 0.2% ====================================================

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle

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