By Alex Kowalski - Mar 9, 2012 9:36 PM GMT+0700
Employers in the U.S. boosted payrolls more than forecast in February, capping the best six month streak of job growth since 2006. The unemployment rate held at 8.3 percent.
The 227,000 increase in payrolls followed a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed today in Washington. The median projection of economists in a Bloomberg News survey called for a 210,000 rise in February employment.
A Chrysler Group LLC employee works on an SUV at the company's assembly plant in Belvidere, Illinois, U.S., on Feb. 2, 2012. Photographer: Daniel Acker/Bloomberg
March 9 (Bloomberg) -- Joseph Grano, chairman and chief executive officer of Centurion Holdings LLC, discusses the U.S. economy, labor market and presidential election. Grano, speaking with Betty Liu on Bloomberg Television's "In the Loop," also talks about tax policy. (Source: Bloomberg)
March 9 (Bloomberg) -- Lewis Alexander, chief U.S. economist at Nomura Holdings Inc., talks about the February U.S. employment report released today. Payrolls increased by 227,000, following a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed. The unemployment rate held at 8.3 percent. Alexander speaks with Stephanie Ruhle on Bloomberg Television's "In the Loop." (Source: Bloomberg)
March 9 (Bloomberg) -- Employers in the U.S. boosted payrolls by 227,000 in February, more than forecast, following a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed today in Washington. The unemployment rate held at 8.3 percent. Peter Cook and Michael McKee report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Employees from NYC Business Solutions, look over resumes at the New York Career Fair in New York. Photographer: Scott Eells/Bloomberg
More jobs are helping fuel the wage gains that drive consumer spending, which accounts for about 70 percent of the economy. The latest pickup in employment may not be convincing enough for Federal Reserve Chairman Ben S. Bernanke, who last week said the labor market remains “far from normal,” a sign policy makers continue to see merit in keeping interest rates low for several years.
“The labor market has found its legs in the last few months, and it looks like there’s enough of a broad base that the momentum can be sustained,” said Julia Coronado, chief economist for North America at BNP Paribas in New York, who projected a 225,000 gain in payrolls. “This leaves the Fed in a bit of limbo as it’s not strong enough to convince them that we’re about to accelerate to much stronger rates of economic growth.”
Trade Deficit Widens
A separate report today from the Commerce Department showed the trade deficit widened in January to the largest since October 2008 as imports rose to a record.
The gap increased 4.3 percent to $52.6 billion from a revised $50.4 billion in December. The median estimate of economists surveyed by Bloomberg News called for a deficit of $49 billion in January. Exports of capital goods, as well as cars and automobile parts, climbed to a record.
The Standard & Poor’s 500 Index rose 0.2 percent to 1,368.31 at 9:31 a.m. in New York. The yield on the benchmark 10-year Treasury note climbed to 2.03 percent from 2.01 percent late yesterday.
Payroll estimates from 94 economists in the Bloomberg survey ranged from increases of 125,000 to 275,000 after an initially estimated 243,000 gain the prior month. Revisions added a total of 61,000 jobs to payrolls in December and January.
Some 1.2 million jobs were created in the last six months, the most since the same period ended May 2006.
‘Hiring Going On’
“There is hiring going on,” Richard Fearon, chief financial officer at Eaton Corp. (ETN) said at a March 6 industrial conference in New York. The Cleveland-based maker of circuit breakers and truck transmissions will “definitely need more manpower to serve” growing demand for tractor-trailers and for the equipment used in construction and hydraulics, he said.
The unemployment rate, derived from a separate survey of households, was forecast to hold at 8.3 percent, according to the survey median. The jobless rate held steady even as the survey showed the labor force grew. Employment climbed by 428,000 in February, while the labor force rose 476,000.
The participation rate, which indicates the share of working-age people in the labor force, rose to 63.9 percent from 63.7 percent.
Private payrolls, which exclude government agencies, rose 233,000 in February after a revised gain of 285,000 the prior month. They were projected to climb by 225,000. Manufacturing payrolls increased by 31,000 after a revised 52,000 gain.
‘Modest and Uneven’
Even with the “positive developments” in the job market, Bernanke told lawmakers last week the “modest and uneven” expansion needs the support of monetary policy. The central bank said in January that economic conditions are likely to warrant low interest rates at least through late 2014.
Policy makers meeting on March 13 are likely to repeat that view while refraining from any additional easing measures, say economists, including Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida.
The Commerce Department last week reported the economy grew at a 3 percent annual pace in the fourth quarter after a 1.8 percent gain in the prior three months.
“The unemployment rate remains elevated, long-term unemployment is still near record levels and the number of persons working part time for economic reasons is very high,” Bernanke said during a Feb. 29 testimony to Congress. Fed policy makers judge “that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” for stable prices and maximum employment, he said.
Retailing, Services
Employment at service-providers increased 203,000. Retail trade payrolls fell 7,400 in February. Professional and business service payrolls increase 82,000 last month, including a 45,200 pickup in temporary hiring.
Education and health services employment jumped 71,000, the most since September 2006, according the Labor Department.
Construction companies reduced payrolls by 13,000 workers last month, the biggest drop since January 2011.
Government payrolls decreased by 6,000 in February, reflecting cutbacks at the federal and state levels.
Average hourly earnings rose 0.1 percent to $23.31, today’s report showed. The average work week for all workers held at 34.5 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, decreased to a three-year low of 14.9 percent from 15.1 percent.
The report also showed a decrease in long-term unemployed Americans. The number of people unemployed for 27 weeks or more fell as a percentage of all jobless, to 42.6 percent from 42.9 percent.
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 in Washington at cwellisz@bloomberg.net
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