Nov. 4 (Bloomberg) -- Employers probably took on fewer workers in October, illustrating the “frustratingly slow” recovery that led Federal Reserve Chairman Ben S. Bernanke to say the U.S. central bank may need to take additional action, economists said before a report today.
Payrolls climbed by 95,000 following a 103,000 September increase, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate was 9.1 percent for a fourth consecutive month, the figures may show.
The crisis in Europe and looming deadline on U.S. budget talks may be prompting companies to hold back on concern failure to reach resolutions will put the global recovery at risk. Fed policy makers project the jobless rate won’t drop under 8 percent until 2013 at the earliest, one reason why Bernanke this week said more stimulus “remains on the table.”
“It’s painfully slow healing,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The outlook really hinges on improvement in hiring to support faster consumer spending. The odds favor another round of monetary easing.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 50,000 to 150,000.
Estimates in the Bloomberg survey for the unemployment rate ranged from 8.9 percent to 9.2 percent.
The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.
Private payrolls, which exclude government jobs, rose 125,000 after a gain of 137,000 in September, economists forecast the Labor Department figures will also show.
The projected gain in total employment would bring the average for July through October to 96,000, compared with 131,000 in the first six months of the year.
Sustained increases of around 150,000 a month are needed to bring unemployment down about half a percentage point over a year, according to Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Through September, the economy had 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.
Faster hiring would spur bigger gains in incomes and bolster confidence, helping cushion against declines in home prices and allowing households to sustain their spending. Purchases grew at a 2.4 percent annual rate in the third quarter and the economy expanded at a 2.5 percent pace, the Commerce Department reported last week.
Hiring and Firing
Retailers like Macy’s Inc. are adding staff ahead of the holidays, while companies including Whirlpool Corp. plan to cut workers, evidence of an uneven economic recovery.
Macy’s is among those betting last quarter’s gain in spending will be sustained during the November-December shopping season. The second-biggest U.S. department-store chain is stepping up hiring of mostly part-time employees by 4 percent for the period. Kohl’s Corp., the fourth-largest U.S. department-store chain, plans to add more than 40,000 holiday workers, a 5 percent gain from 2010.
Whirlpool, the world’s largest maker of household appliances, said it planned to cut more than 5,000 jobs and trimmed its earnings forecast. The reductions will be primarily within North America and Europe and include the closure of the refrigeration manufacturing site in Fort Smith, Arkansas, by mid-2012.
“We are taking necessary actions to address a much more challenging global economic environment,” Chief Executive Officer Jeff Fettig said in a statement on Oct. 28.
Stocks tumbled earlier this week after Greek Prime Minister George Papandreou said he wanted to hold a referendum on Europe’s rescue plan. Shares rallied over the past two days as Greece moved closer to accepting a bailout and the European central bank unexpectedly cut rates. The Standard & Poor’s 500 Index climbed 1.9 percent yesterday to close at 1,261.15.
Fed policy makers, who refrained from taking additional steps to ease monetary policy at their meeting this week, said in a statement that there are “significant downside risks to the economic outlook.”
The central bank’s latest forecasts showed less optimism about the economy and employment. Policy makers project growth next year of 2.5 percent to 2.9 percent, with unemployment in the 8.5 percent to 8.7 percent range. Joblessness in 2013 is forecast at 7.8 percent to 8.2 percent.
Additional stimulus “remains on the table,” Bernanke said at a Nov. 2 press conference in Washington, declining to specify conditions that would prompt a move. “While we still expect that economic activity and labor market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow.”
--With assistance from Chris Middleton in Washington. Editors: Carlos Torres, Vince Golle
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