Payrolls probably grew at a slower pace in August and unemployment exceeded 8 percent for a 43rd month, highlighting why Ben S. Bernanke said the lack of jobs is a “grave concern” for U.S. policy makers, economists said before a report this week.
The employment tally of 125,000 would follow a 163,000 gain in July, according to the median forecast of 71 economists surveyed by Bloomberg ahead of Labor Department figures Sept. 7. The jobless rate likely held at 8.3 percent. A separate report may show manufacturing teetered between growing and shrinking.
“Payroll growth is pretty lackluster,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “It’s going to be hard to bring down the unemployment rate quickly. Demand is soggy and on top of that we have weakening exports and fiscal policy uncertainty.”
The stagnant labor market is one reason why more action on the monetary policy front remains an option, Federal Reserve Chairman Bernanke said last week. A cycle of below-average gains in employment and consumer spending is now being reinforced by a global slowdown and concern over the so-called U.S. fiscal cliff, making a rebound more daunting to achieve.
The unemployment rate has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
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. Including the July advance, 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.
Businesses reducing workers include Google Inc., which said it will cut about 4,000 jobs at its Motorola Mobility Holdings Inc. unit. Two-thirds of the reductions will be outside the U.S., the Mountain View, California-based company said Aug. 13.
Lexmark International Inc., a Lexington, Kentucky-based printer maker, said on Aug. 28 it plans to cut 1,700 jobs globally and shut a factory in the Philippines.
Dollar Tree Inc., the U.S. operator of more than 4,500 discount stores, is attracting bargain-hunting shoppers as joblessness stays elevated, Chief Executive Officer Bob Sasser said.
Customers are “struggling to balance their family budgets in the face of persistently high unemployment and now unpredictable fuel prices,” he said on an Aug. 16 conference call with analysts.
Bernanke, in an Aug. 31 speech to central bankers and economists at an annual forum in Jackson Hole, Wyoming, focused on “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. It entails “enormous suffering and waste of human talent,” and persistently high unemployment “will wreak structural damage on our economy that could last for many years.”
Stocks climbed on the prospect that the central bank will do more. The Standard & Poor’s 500 Index rallied 0.5 percent to close at 1,406.58 on Aug. 31, extending a third consecutive monthly gain.
Jobs 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.
Manufacturing, a pillar of growth of the early part of the recovery, is losing steam as global demand softens. The Institute for Supply Management Inc.’s factory index registered a reading of 50, the dividing line between growth and contraction, compared with 49.8 in July, according to the Bloomberg survey median. The report will be released on Sept. 4.
Two days later, the Tempe, Arizona-based ISM may report its services index, which covers almost 90 percent of the economy, was little changed at 52.5 in August from the prior month’s 52.6 reading, according to economists surveyed.
Bloomberg Survey ================================================================ Release Period Prior Median Indicator Date Value Forecast ================================================================ ISM Manu Index 9/4 Aug. 49.8 50.0 ISM Prices Index 9/4 Aug. 39.5 46.0 Construct Spending MOM% 9/4 July 0.4% 0.4% Vehicle Sales Mlns 9/4 Aug. 14.1 14.2 Domestic Vehicles Mlns 9/4 Aug. 11.0 11.1 Productivity QOQ% 9/5 2Q 1.6% 1.8% Labor Costs QOQ% 9/5 2Q 1.7% 1.4% ADP Payroll ,000’s 9/6 Aug. 163 145 Initial Claims ,000’s 9/6 1-Sep 374 370 ISM NonManu Index 9/6 Aug. 52.6 52.5 Nonfarm Payrolls ,000’s 9/7 Aug. 163 125 Private Payrolls ,000’s 9/7 Aug. 172 140 Manu Payrolls ,000’s 9/7 Aug. 25 10 Unemploy Rate % 9/7 Aug. 8.3% 8.3% Hourly Earnings MOM% 9/7 Aug. 0.1% 0.2% Hourly Earnings YOY% 9/7 Aug. 1.7% 1.8% Avg Weekly Hours 9/7 Aug. 34.5 34.5 ================================================================