By Bob Willis - Oct 7, 2011 5:02 PM GMT+0700
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Job seekers wait in line outside of a job fair at the Park Ridge Community Center in Park Ridge, Illinois. Photographer: Tim Boyle/Bloomberg
Oct. 7 (Bloomberg) -- James Shugg, a senior economist at Westpac Banking Corp., discusses the U.S. economy and the outlook for today's September non-farm payrolls report. He talks with Francine Lacqua on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Oct. 7 (Bloomberg) -- Sarah Hewin, senior economist at Standard Chartered Plc, discusses Bank of England and European Central Bank monetary policy and the outlook for today's U.S. September non-farm payrolls report. She speaks with Linzie Janis on Bloomberg Television's "Countdown." (Source: Bloomberg)
A projected gain in U.S. payrolls in September was probably too small to bring down the unemployment rate as concern mounted that the global recovery was losing momentum, economists said before a report today.
Employment climbed by 55,000 workers after no change in August, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate was 9.1 percent for a third consecutive month, according to the forecasts.
The debt crisis in Europe, political gridlock in the U.S. and plunging stock prices have led to a drop in consumer and business confidence that may keep hurting spending and hiring. The risk that the world’s largest economy may fall back into a recession has prompted the Federal Reserve and President Barack Obama to announce further measures to sustain the expansion.
“Businesses remain reluctant to add workers,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Much of the weakness in hiring can be blamed on uncertainty.”
Unemployment has exceeded 8 percent since February 2009, the longest stretch of such elevated joblessness since monthly records began in 1948.
Private payrolls, which exclude government jobs, rose 90,000 after a gain of 17,000 in the prior month, economists forecast the employment report will also show.
While a labor dispute at Verizon Communications Inc. (VZ) depressed employment in August, its resolution may have added about 45,000 workers back to payrolls last month, according to John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston.
State Workers
Conversely, the return of state government workers in Minnesota lifted the August payroll count by 23,000, a boost that wasn’t repeated last month.
The economy expanded at a 1.3 percent pace in the second quarter following a 0.4 percent gain in the first three months of 2011, the weakest performance in two years, the Commerce Department reported last week. Consumer spending grew 0.7 percent, the least since the last three months of 2009.
Jan Hatzius, chief economist at Goldman Sachs Group Inc. in New York, says the odds of a renewed U.S. recession are rising as confidence and spending have slumped. This week he said he saw a 40 percent chance the U.S. would slip back into a recession over the next year.
Julia Coronado, chief economist for North America at BNP Paribas in New York, forecasts a “mild recession.”
The projected gain in total payrolls would bring the average from July through September to 47,000, down from 97,000 in the second quarter and 166,000 in the first three months of the year.
200,000 a Month
Sustained increases of around 200,000 a month are needed to bring unemployment down about a percentage point over a year, according to Eric Green, chief market economist at TD Securities Inc. in New York.
Through August, the economy had recovered about 1.9 million of the 8.75 million jobs lost as a result of the 18-month recession that ended in June 2009.
“Economic growth remains slow,” Fed policy makers said Sept. 21 as they announced a plan to bring down longer-term lending rates. While officials said they “expect some pickup in the pace of recovery over coming quarters,” they anticipate “the unemployment rate will decline only gradually.”
Obama last month proposed a $447 billion jobs plan that economists surveyed by Bloomberg forecast would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year.
Stock Market
The Standard & Poor’s 500 Index had its biggest quarterly drop from July through September since 2008 on concern the recovery will falter. It’s climbed 6 percent so far this week. Futures expiring in December fell 0.2 percent from yesterday to 1,155.2 as of 10:33 a.m. in London.
Citigroup Inc. (C), the third-biggest U.S. bank, is among firms that have turned more cautious about hiring. It said last month it will limit hiring to only “critical” jobs as the economic slowdown continues and revenue slumps.
“We are currently only filling positions we believe are critical to the line of business or function,” Shannon Bell, a spokeswoman for the New York-based bank, said in an interview Sept. 15.
Nonetheless, some companies are planning to boost payrolls. Ford Motor Co. (F) this week said it has committed to add 12,000 hourly jobs in its U.S. manufacturing plants by 2015 as part of an agreement with the United Auto Workers.
Ford said it will be “in-sourcing” jobs from Mexico, China and Japan. Ford said this will be 5,750 hourly jobs more than a previously announced 7,000 positions to be added by the end of 2012.
Bloomberg Survey ============================================================== Nonfarm Private Manu Unemploy Payrolls Payrolls Payrolls Rate ,000’s ,000’s ,000’s % ============================================================== Date of Release 10/07 10/07 10/07 10/07 Observation Period Sept. Sept. Sept. Sept. -------------------------------------------------------------- Median 55 90 0 9.1% Average 55 94 1 9.1% High Forecast 115 157 20 9.2% Low Forecast -50 50 -15 9.0% Number of Participants 91 49 23 86 Previous 0 17 -3 9.1% -------------------------------------------------------------- 4CAST 20 60 --- 9.2% ABN Amro 60 80 --- 9.1% Action Economics 100 130 -5 9.1% Aletti Gestielle 90 129 -2 9.1% Ameriprise Financial 40 55 -5 9.2% Banesto 70 --- --- --- Bank of Tokyo- Mitsubishi 80 110 --- 9.1% Bantleon Bank AG 40 --- --- 9.1% Barclays Capital 25 65 5 9.1% Bayerische Landesbank 70 --- --- 9.1% BBVA 60 75 --- 9.1% BMO Capital Markets 40 --- --- 9.2% BNP Paribas 0 50 --- 9.2% BofA Merrill Lynch 70 90 --- 9.1% Briefing.com 50 90 --- 9.1% Capital Economics 0 --- --- 9.1% CIBC World Markets 65 --- -3 9.2% Citi 50 110 5 9.1% ClearView Economics 80 110 10 9.2% Commerzbank AG 75 --- --- 9.1% Credit Agricole CIB 0 --- --- --- Credit Suisse 35 --- --- 9.2% Daiwa Securities America 95 --- --- 9.1% DekaBank 35 --- --- 9.2% Desjardins Group 15 --- --- 9.1% Deutsche Bank Securities 70 95 --- 9.1% Deutsche Postbank AG 70 --- --- 9.1% DZ Bank 52 --- --- 9.1% Exane 20 --- --- 9.2% Fact & Opinion Economics 50 60 --- 9.2% First Trust Advisors 80 110 0 9.2% FTN Financial 80 120 --- 9.1% Goldman, Sachs & Co. 50 --- --- 9.1% Helaba 100 --- --- 9.1% High Frequency Economics 0 50 --- 9.2% HSBC Markets 50 80 --- 9.2% Hugh Johnson Advisors 102 120 10 9.1% IDEAglobal 50 75 -5 9.1% IHS Global Insight 25 --- --- 9.2% Informa Global Markets 15 55 5 9.1% ING Financial Markets 40 85 -8 9.1% Insight Economics 75 --- --- 9.2% Intesa-SanPaulo 70 --- --- 9.2% Iur Capital -30 --- --- --- J.P. Morgan Chase 30 90 0 9.2% Janney Montgomery Scott 76 94 0 9.1% Jefferies & Co. 70 115 20 9.0% JH Cohn 40 50 --- --- Landesbank Berlin 105 --- --- 9.1% Landesbank BW 70 --- --- 9.1% Laurentian Bank 95 120 --- 9.1% LCA Consultores 9 --- --- --- Manulife Asset Management 50 --- -5 9.1% Maria Fiorini Ramirez 85 115 --- 9.1% Market Securities 20 --- --- 9.1% MET Capital Advisors -50 --- --- 9.2% MF Global 85 135 0 9.2% Mizuho Securities 75 --- --- 9.2% Moody’s Analytics 60 100 -15 9.1% Morgan Keegan & Co. 70 --- --- 9.2% Morgan Stanley & Co. 100 --- --- 9.2% National Bank Financial 110 --- --- 9.1% Natixis 40 --- --- 9.1% Nomura Securities 60 80 5 9.1% Nord/LB 50 80 -10 9.1% OSK Group/DMG 35 --- --- 9.2% Paragon Research 25 --- --- 9.2% Parthenon Group 35 54 --- 9.1% Pierpont Securities 110 135 --- 9.1% PineBridge Investments 25 50 --- 9.2% PNC Bank 65 --- --- 9.2% Prestige Economics 35 70 --- 9.1% Raiffeisenbank International 85 130 --- 9.2% Raymond James 90 115 --- 9.1% RBC Capital Markets 45 65 --- 9.2% RBS Securities 30 --- --- 9.1% Scotia Capital 30 --- --- 9.1% SMBC Nikko Securities 45 85 --- 9.1% Societe Generale 115 155 --- 9.0% Standard Chartered 55 90 --- 9.1% State Street Global Markets 71 104 1 9.1% Stone & McCarthy Research 100 157 15 9.1% TD Securities 60 85 --- 9.1% UBS 65 115 --- 9.1% UniCredit Research 50 --- --- 9.2% Union Investment 40 --- --- 9.1% University of Maryland 80 100 0 9.1% Wells Fargo & Co. 35 --- --- 9.1% WestLB AG 70 --- --- 9.1% Westpac Banking Co. 30 --- --- 9.2% Wrightson ICAP 90 125 --- 9.1% ==============================================================
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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