Bloomberg News

U.S. Payrolls Probably Picked Up

May 04, 2012

A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois. Photographer: Daniel Acker/Bloomberg

A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois. Photographer: Daniel Acker/Bloomberg

Hiring in the U.S. probably picked up in April after the smallest gain in five months, showing the labor market may be regaining momentum, economists said before a report today.

Payrolls climbed by 160,000 workers following a 120,000 March increase, according to the median forecast of 85 economists surveyed by Bloomberg News. The jobless rate held at a three-year low of 8.2 percent, the figures may show.

The increase would leave the labor market 5 million jobs short of the 8.8 million lost as a result of the 18-month recession that ended almost three years ago. While some companies like Chrysler Group LLC are adding workers, Federal Reserve policy makers still view unemployment as “elevated” and plan to hold borrowing costs low through late 2014.

“We’re seeing a moderate pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St Petersburg, Florida. “The improvement will help fuel consumer spending to some extent. It’s still not fast enough to reduce the unemployment rate a lot or to quickly make up for the ground lost on employment during the recession.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 89,000 to 210,000.

The jobs data come six months before Americans head to the polls to either re-elect President Barack Obama or choose Republican Mitt Romney, who has said White House policies have done little to help U.S. workers.

Today’s Labor Department report may show private payrolls, which exclude government jobs, climbed 165,000 after rising 121,000 in March, economists forecast.

2012 Average

The projected gain in total payrolls for April would bring the average for this year to 199,000, compared with 206,750 in the first four months of 2011.

Estimates for the jobless rate, derived from a separate survey of households, ranged from 8.1 percent to 8.3 percent. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.

Faster economic growth would help lay the groundwork for more hiring. The economy expanded at a 2.2 percent annual rate in the first quarter after a 3 percent pace the prior three months, the Commerce Department reported last week. Consumer spending grew 2.9 percent, the most in more than a year.

Stocks have gained this year on signs the economy will keep expanding while Europe struggles with recession and Asia cools. The Standard & Poor’s 500 Index has climbed 11 percent so far in 2012.

Chrysler Hiring

Chrysler, the automaker controlled by Fiat SpA, said it will accelerate the addition of 1,100 jobs and a third crew of workers by hiring them in November, pulling ahead plans for increasing production in early 2013. Earlier this week, it also said four plants will skip normally scheduled two-week midyear shutdowns to meet increased demand.

Chrysler led the five largest automakers by U.S. sales in exceeding analysts’ estimates for April, reporting a 20 percent jump. Chrysler, Ford Motor Co. and Hyundai Motor Co. this week said they will add shifts at factories this year. General Motors Co. (GM:US), the top-selling automaker in the U.S., raised its forecast for full-year U.S. light-vehicle sales.

“Over time, we believe that strength in the manufacturing sector and strong retail sales will continue to lead to more job creation,” Don Johnson, vice president of U.S. sales at GM, said on a May 1 conference call with analysts. “That’s going to help more consumers put the recession behind them, gaining even more confidence and drive vehicle sales higher.”

Global Economy

The improvement in the U.S. contrasts with some of the other major economies. Joblessness in the 17-nation euro area increased to 10.9 percent in March, the highest since April 1997, from 10.8 percent a month earlier, data showed this week. United Parcel Service Inc. (UPS:US), the world’s largest package-delivery company, is among firms taking note.

“During the quarter, the most positive news has come from the U.S. where indications of economic rebound are evident,” Scott Davis, chief executive officer of UPS, said on an April 26 conference call. “Retail sales have grown faster than expected and the employment environment has improved. On the other hand, economies in other parts of the world continue to face challenges.”

Job Cuts

At the same time, cost-cutting is prompting cuts at some companies. H&R Block Inc. (HRB:US), the biggest U.S. tax preparer, plans to reduce 350 jobs and close about 200 company-owned offices. AMR Corp.’s American Airlines this month said it will eliminate 1,200 airport agent, baggage and cargo jobs as part of a bankruptcy restructuring plan to trim annual labor spending.

“Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated,” Fed policy makers said in an April 25 statement. The group “expects economic growth to remain moderate over coming quarters and then to pick up gradually,” and “anticipates that the unemployment rate will decline gradually.”

The central bankers last month repeated their plan to hold borrowing costs low through late 2014 to spur growth.

Fed officials also cut forecasts for the jobless rate, to an average 7.8 percent to 8 percent in the fourth quarter from a January projection of 8.2 percent to 8.5 percent, according to central tendency estimates released April 25.

                       Bloomberg Survey

================================================================
                           Nonfarm  Private Unemploy
                          Payrolls Payrolls     Rate
                            ,000’s   ,000’s        %
================================================================

Date of Release              05/04    05/04    05/04
Observation Period           April    April    April
----------------------------------------------------------------
Median                         160      165     8.2%
Average                        158      166     8.2%
High Forecast                  210      209     8.3%
Low Forecast                    89      105     8.1%
Number of Participants          85       44       83
Previous                       120      121     8.2%
----------------------------------------------------------------
4CAST                          190      190     8.3%
ABN Amro                       155      160     8.2%
Action Economics               180      180     8.2%
Aletti Gestielle               170     ---      8.2%
Ameriprise Financial           140      145     8.2%
Banca Aletti                   190      189     8.3%
Bank of Tokyo-Mitsubishi       150      150     8.1%
Bantleon Bank AG               160     ---      8.2%
Barclays Capital               150      160     8.2%
Bayerische Landesbank          155     ---      8.2%
BBVA                           150      165     8.2%
BMO Capital Markets            160     ---      8.2%
BNP Paribas                    125      130     8.3%
BofA Merrill Lynch             155      155     8.3%
Briefing.com                   140      145     8.2%
Capital Economics              175     ---      8.2%
CIBC World Markets             160     ---      8.2%
Citi                           145      155     8.2%
ClearView Economics            180      190     8.3%
Commerzbank AG                 180     ---      8.2%
Credit Agricole CIB            130     ---      8.2%
Credit Suisse                  150      155     8.2%
Daiwa Securities America       175     ---      8.2%
Danske Bank                    170      170     8.2%
DekaBank                       160     ---      8.1%
Desjardins Group               170     ---      8.2%
Deutsche Bank Securities       175      175     8.1%
Deutsche Postbank AG           200     ---      8.2%
DZ Bank                        150     ---      8.2%
Exane                          150     ---      8.2%
Fact & Opinion Economics       180      185     8.2%
First Trust Advisors           145      155     8.1%
FTN Financial                  100     ---      8.2%
Goldman, Sachs & Co.           125     ---      8.2%
Helaba                         200     ---      8.2%
High Frequency Economics       125     ---      8.1%
HSBC Markets                   170      167     8.2%
IDEAglobal                     175      185     8.2%
IHS Global Insight             165     ---      8.3%
Informa Global Markets         165     ---      8.2%
ING Financial Markets          210      190     8.2%
Insight Economics              195     ---      8.2%
Intesa Sanpaulo                140     ---      8.2%
Iur Capital                     95     ---      8.2%
J.P. Morgan Chase              145      150     8.2%
Janney Montgomery Scott        155      165     8.1%
Jefferies & Co.                175      180     8.1%
Landesbank Berlin              175     ---      8.2%
Landesbank BW                  150     ---      8.2%
Maria Fiorini Ramirez          150      155     ---
Market Securities              115     ---      8.2%
MET Capital Advisors           120     ---      8.3%
Mizuho Securities              175     ---      8.2%
Modal Asset                   ---       162     ---
Moody’s Analytics              125      130     8.1%
Morgan Stanley & Co.           130     ---      8.2%
National Bank Financial        140     ---      8.2%
Natixis                        110     ---      8.2%
Nomura Securities              195      200     8.2%
Nord/LB                        160     ---      8.2%
OSK Group/DMG                  190     ---      8.2%
O’Sullivan                     125      135     8.2%
Paragon Research               140     ---      8.2%
Parthenon Group                203      209     8.1%
Pierpont Securities            190      195     8.2%
PineBridge Investments         175     ---      8.2%
PNC Bank                       175     ---      8.2%
Prestige Economics             155      157     8.2%
Raiffeisenbank International   155      155     8.1%
Raymond James                  160      165     8.1%
RBC Capital Markets            160      160     8.2%
RBS Securities                 195      200     8.2%
Scotia Capital                 150     ---      8.3%
SMBC Nikko Securities          150      150     8.2%
Societe Generale               105      105     8.1%
Southern Polytechnic State      89     ---      ---
Standard Chartered             130      134     8.2%
Stone & McCarthy Research      160      170     8.1%
TD Securities                  185      185     8.2%
UBS                            170      180     8.1%
UniCredit Research             180     ---      8.3%
University of Maryland         175      180     8.2%
Wells Fargo & Co.              159     ---      8.2%
WestLB AG                      180     ---      8.2%
Westpac Banking Co.            130     ---      8.3%
Wrightson ICAP                 185      185     8.2%
================================================================

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois. Photographer: Daniel Acker/Bloomberg May 4 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group Inc., talks about the U.S. economy and the April employment report. He speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "InsideTrack." James Tisch, chief executive officer of Loews Corp., also speaks. (Source: Bloomberg) May 3 (Bloomberg) -- Michael Feroli, chief U.S. economist at JPMorgan Chase Co., talks about the outlook for the U.S. labor market and economy. Feroli speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)

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Companies Mentioned

  • GM
    (General Motors Co)
    • $33.94 USD
    • -0.09
    • -0.27%
  • UPS
    (United Parcel Service Inc)
    • $99.44 USD
    • -0.19
    • -0.19%
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