By Bob Willis - Oct 7, 2011 7:58 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) -- Employers added more payrolls than forecast in September, job gains were revised up in the prior two months and hours and earnings increased, helping ease concerns the U.S. labor market is deteriorating. Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. Betty Liu, Lizzie O'Leary and Michael McKee report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Oct. 7 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group, talks about the outlook for today's U.S. September non-farm payrolls report and the economy. Hatzius speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." Jeffrey Sachs, an economics professor at Columbia University, also speaks. (Source: Bloomberg)
Employers added more payrolls than forecast in September, job gains were revised up in the prior two months and hours and earnings increased, helping ease concerns the U.S. labor market is deteriorating.
Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. The median forecast in a Bloomberg News survey called for a rise of 60,000. The gain reflected the return to work of 45,000 telecommunications employees. The jobless rate held at 9.1 percent.
Faster job growth is a sign employers remain confident the U.S. will avoid a renewed slump, even as unemployment is forecast to remain above 8 percent through 2013. 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.
“It’s steady growth at a painfully slow pace,” said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado, who forecast a gain of 100,000 jobs. “The economy isn’t doing well but it didn’t lose the momentum that the markets feared. If anything, the third and fourth quarters will be stronger than the first and second.”
Futures on the Standard & Poor’s 500 Index expiring in December climbed 0.9 percent to 1,168.20 at 8:55 a.m. in New York after losing as much as 0.4 percent. The yield on the 10- year Treasury note rose 10 basis points to 2.09 percent.
Revisions to previous reports added a total of 99,000 jobs to payrolls in July and August. The figure for August was revised to a gain of 57,000 from no change.
Economist Estimates
Estimates of the 91 economists surveyed by Bloomberg for overall payrolls ranged from a decline of 50,000 to a 115,000 increase. The unemployment rate was projected to hold at 9.1 percent, according to the survey median.
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 137,000 after a gain of 32,000 in the prior month, the Labor Department said.
The share of the eligible population holding a job rose to 58.3 percent from 58.2 percent.
While a labor dispute at Verizon Communications Inc. (VZ) depressed employment in August, its resolution added about 45,000 workers back to payrolls last month.
Conversely, the return of state government workers in Minnesota that lifted the August payroll count by 23,000 wasn’t repeated last month.
Government Employment
Government payrolls decreased by 34,000 in September. Employment at state governments rose by 2,000 last month while local government employment slumped 35,000.
Factory payrolls declined 13,000 in September, the biggest decrease since August 2010, after a 4,000 decline in August.
Employment at service-providers increased 85,000 in September, the most since April. Construction employment climbed 26,000 last month, the biggest gain since February and led by a jump in non-residential building payrolls.
Average hourly earnings rose 0.2 percent to $23.12, today’s report showed. The average work week for all workers climbed six minutes to 34.3 hours.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 16.5 percent, the highest this year, from 16.2 percent. The number of Americans working part-time for “economic reasons” jumped 444,000 to 9.3 million.
Jobs Recovered
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.
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.
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 the year, 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.”
Fed on Economy
“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.
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.
States and local governments are freezing hiring or cutting staff. New York Mayor Michael Bloomberg’s administration this week asked agency heads to cut spending by $2 billion over the next 18 months and freeze hiring on concern that a slowing economy may reduce city revenue.
“We’re looking at extreme economic uncertainty, and state and federal governments that are likely to further cut funds they return to the city,” Caswell Holloway, deputy mayor for operations, said in a statement. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
Some companies are planning to boost payrolls. Ford Motor Co. (F) this week said it has committed to add about 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.
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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