Oct. 8 (Bloomberg) -- American employers added more workers in September than forecast and earnings and hours also rose, allaying concern the economy is slipping into another recession.
Payrolls increased by 103,000 after a 57,000 gain in August, the Labor Department said yesterday in Washington. The median forecast in a Bloomberg News survey of economists called for an increase of 60,000. The figures reflected the end of a strike at Verizon Communications Inc. that brought 45,000 people back to work. The jobless rate held at 9.1 percent.
Treasuries fell as the report added to evidence the world’s largest economy is maintaining its expansion. The pace of job growth is still too slow to push down the unemployment rate as companies hold back on hiring amid a debt crisis in Europe, political gridlock in the U.S. and a plunge in stock prices.
“These numbers are another argument against the idea that the economy is moving toward a recession,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “We’re mired in a period of anemic growth, but the economy is growing nonetheless.”
The yield on the 10-year Treasury note rose to 2.06 percent in New York late yesterday from 1.99 percent a day earlier. The Standard & Poor’s 500 Index fell 0.8 percent to 1,155.46.
Revisions added a total of 99,000 jobs to payrolls in July and August, yesterday’s employment report showed.
The figures capped a week of data indicating the economy is gaining strength after growing at the slowest pace in two years in the first half of 2011.
Manufacturing unexpectedly accelerated in September, propelled by gains in exports and production, figures from the Institute for Supply Management showed. Construction spending expanded in August, and orders for capital equipment increased by the most in three months, government data showed.
“The economy is certainly not as weak as it was thought to be over the last couple of months,” said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Labor Secretary Hilda Solis used the report to push President Barack Obama’s $447 billion jobs plan consisting of tax cuts and infrastructure projects.
“We need to do more,” Solis said in a Bloomberg Television interview yesterday. She said Obama’s plan, proposed last month, will create between 1 million to 1.9 million jobs.
Ford Motor Co. is among companies planning to boost payrolls, saying this week 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.
Jobs at Ford
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.
Sustained increases of around 200,000 jobs a month are needed to reduce the jobless rate by about a percentage point over a year, according to Eric Green, chief market economist at TD Securities Inc. in New York.
More Americans who would like a full-time job are settling for part-time work instead. They are counted in the underemployment rate, which increased to 16.5 percent, the highest this year, from 16.2 percent. The number of people working part-time for “economic reasons” jumped 444,000 to 9.3 million.
Unemployment has exceeded 8 percent since February 2009, the longest stretch of such elevated joblessness since monthly records began in 1948. Through September, the economy has recovered about 2.09 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,” Federal Reserve 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.”
Private payrolls, which exclude government jobs, rose 137,000 after a gain of 32,000 in the prior month, the Labor Department said.
Factory payrolls declined 13,000 in September, the biggest decrease since August 2010. Employment at service-providers increased 85,000 in September, the most since April. Construction employment climbed 26,000, the biggest gain since February, led by a jump in non-residential building.
Average hourly earnings rose 0.2 percent to $23.12. The average work week for all workers climbed six minutes to 34.3 hours.
Government payrolls decreased by 34,000 last month. Employment rose by 2,000 at state governments and slumped 35,000 at the local level. The loss at state governments was driven by education payrolls, which slipped 24,400 to a more than six-year low of 7.8 million.
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.
--With assistance from Chris Middleton, Tim Homan and Alex Kowalski in Washington and Tom Keene and Ken Prewitt in New York. Editors: Carlos Torres, Vince Golle
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