Bloomberg News

Employers in U.S. Probably Expanded Payrolls at a Faster Pace

October 22, 2013

Job Seekers Talk with Target Corp. Employees at Hiring Event

Job seekers talk with Target Corp. employees during a hiring event at a new store in San Francisco, California. Photographer: David Paul Morris/Bloomberg

Employers probably added more workers in September than in the prior month and the jobless rate held at the lowest level since 2008, a sign the U.S. labor market was picking up before the government’s partial shutdown.

Payrolls rose by 180,000 last month, the most since April, after a 169,000 gain in August, according to the median forecast of 93 economists surveyed by Bloomberg. The report, delayed by the 16-day shutdown that ended last week, was originally slated for Oct. 4.

Sustaining the advance in the labor market hinges on how quickly the world’s largest economy can bounce back from the loss of business caused by the fiscal impasse. The budget dispute may have trimmed fourth-quarter growth, and Federal Reserve policy makers will probably wait until March to begin trimming stimulus, a Bloomberg survey showed last week.

“Payrolls will look a little better” compared with the previous few months, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “From here on, we’ll see some impact from the shutdown, though I wouldn’t expect that to be long-lived. As the overall economy improves, it will lift the labor market along with it.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from payroll increases of 100,000 to 256,000.

The unemployment rate, derived from a separate Labor Department survey of households, held at 7.3 percent last month, according to the median projection in the Bloomberg survey.

Faster hiring that leads to bigger gains in wages would help accelerate consumer spending, which accounts for about 70 percent of the economy.

Private Employment

Private employment, which excludes government agencies, increased 180,000 in September following a 152,000 advance the prior month, economists predicted.

Even as the debate on fiscal policy heated up last month, retailers began announcing plans to add workers for the holiday-shopping season.

Wal-Mart Stores Inc. (WMT:US), the world’s largest retailer, is hiring 55,000 seasonal employees, a 10 percent rise from last year. Target Corp. (TGT:US) said it plans to take on about 70,000 workers. Kohl’s Corp. (KSS:US) will add about 53,000 workers for the holiday season, about the same as last year.

The projected gain in payrolls for September would still be below the average 195,000 monthly increase in the first half of 2013. Through August, the U.S. had recovered 6.8 million of the 8.7 million jobs lost as a result of the 18-month recession that ended in June 2009.

Government Shutdown

President Barack Obama last week signed legislation that funds the government through mid-January and suspends the nation’s $16.7 trillion debt limit, for now ending the threat of default, which economists had warned could tip the U.S. back into a recession.

The October employment report will be pushed back to Nov. 8 from the originally announced Nov. 1, according to the Labor Department’s website.

Fed policy makers, scheduled to gather Oct. 29-30, are trying to gauge the strength of the U.S. expansion without federal economic data that was suspended when some government agencies closed.

The central bankers will wait until their March 18-19 meeting to pare the monthly pace of asset buying to $70 billion from $85 billion, according to the median of 40 responses in a Bloomberg survey last week.

Fed’s View

“Conditions in the job market today are still far from what all of us would like to see,” Chairman Ben S. Bernanke said at a press conference following the Fed’s September meeting.

While the labor market has shown improvement, the partial federal shutdown and the debt limit showdown may have been a source of concern for employers.

San Francisco based URS Corp. (URS:US), a provider of engineering and construction services, furloughed about 3,000 employees, saying the total includes employees idled by the closing of a government facility where they work as well as those directed by U.S. officials to halt operations or cut staffing.

Among other companies paring their workforce, San Francisco-based Wells Fargo & Co. (WFC:US), the biggest U.S. mortgage lender, last week said it eliminated an additional 925 jobs in its home-loan unit and has cut more than 5,700 since midyear.

                       Bloomberg Survey

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

Date of Release              10/22    10/22    10/22    10/22
Observation Period           Sept.    Sept.    Sept.    Sept.
----------------------------------------------------------------
Median                         180      180        5     7.3%
Average                        180      180        6     7.3%
High Forecast                  256      245       15     7.4%
Low Forecast                   100       95        0     7.1%
Number of Participants          93       53       28       89
Previous                       169      152       14     7.3%
----------------------------------------------------------------
4CAST                          170      175     ---      7.4%
ABN Amro                       200      210     ---      7.3%
Action Economics               170      180       10     7.3%
Ameriprise Financial           160      160        6     7.4%
Banca Aletti                   190      195        5     7.3%
Bank of the West               180     ---        10     7.3%
Bank of Tokyo-Mitsubishi       210     ---      ---      7.1%
Banorte-IXE                    185     ---      ---      7.3%
Bantleon Bank AG               200     ---      ---      7.3%
Barclays                       200      210     ---      7.2%
Bayerische Landesbank          183     ---      ---      7.3%
BBVA                           180      187        5     7.3%
BMO Capital Markets            160     ---      ---      7.3%
BNP Paribas                    170      160     ---      7.3%
BofA Merrill Lynch             170      170     ---      7.3%
Briefing.com                   165      180     ---      7.3%
Capital Economics              200     ---      ---      7.3%
CIBC World Markets             185     ---      ---      7.3%
Citi                           180      170        0     7.3%
ClearView Economics            178      180       10     7.2%
CohnReznick                    180      190     ---      7.3%
Comerica                       175     ---         8     7.3%
Commerzbank AG                 175     ---      ---      7.3%
Credit Agricole CIB            160     ---      ---      7.3%
Credit Suisse                  165      175     ---      7.2%
CTI Capital                    173     ---      ---      ---
Daiwa Securities America       190     ---      ---      7.3%
Danske Bank A/S                180      180        8     7.3%
DekaBank                       190     ---      ---      7.2%
Desjardins Group               185     ---      ---      7.3%
Deutsche Bank Securities       170      170     ---      7.3%
Deutsche Postbank AG           180     ---      ---      7.3%
First Trust Advisors           197      202        2     7.3%
FTN Financial                  180      170     ---      7.3%
Goldman, Sachs & Co.           200     ---      ---      7.3%
Helaba                         175     ---      ---      7.3%
High Frequency Economics       185     ---      ---      7.3%
HSBC Markets                   171      172        5     7.3%
Hugh Johnson Advisors          185      189       15     7.4%
IDEAglobal                     190      185        5     7.2%
IHS Global Insight             155     ---      ---      7.3%
Informa Global Markets         195     ---         0     7.3%
ING Financial Markets          190      195        7     7.2%
Intesa Sanpaolo                180     ---      ---      7.3%
Investec Securities            175     ---      ---      7.3%
J.P. Morgan Chase              195      200        5     7.2%
Janney Montgomery Scott        155      160        2     7.2%
Jefferies                      190      180       10     7.2%
John Hancock Financial         175      180     ---      7.3%
Landesbank Berlin              250     ---      ---      7.2%
Landesbank BW                  200     ---      ---      7.2%
LinkUp                         110     ---      ---      ---
Lloyds Tsb Bank                189      194        5     7.3%
Maria Fiorini Ramirez          180      185     ---      ---
Market Securities              172     ---      ---      7.3%
MET Capital Advisors           180      169     ---      7.3%
Mizuho Securities              175     ---      ---      7.4%
Moody’s Analytics              160      170        5     7.2%
Morgan Stanley                 185      190       10     7.3%
National Bank Financial        160     ---      ---      7.3%
Natixis                        185     ---      ---      7.3%
Nomura Securities              180      180        5     7.2%
Nord/LB                        170      175        5     7.3%
OSK-DMG                        181     ---      ---      7.3%
Oxford Economics USA           165      175     ---      7.3%
Pantheon Macroeconomics        160     ---      ---      7.2%
Paragon Research               256     ---      ---      7.2%
Pierpont Securities            165      165     ---      7.3%
PineBridge Investments        ---       195     ---      7.3%
PNC Bank                       185      180        5     7.3%
Prestige Economics             160     ---      ---      7.4%
Raiffeisenbank International   175      180     ---      7.3%
Raymond James                  165      155     ---      7.3%
RBC Capital Markets            185      190     ---      7.3%
RBS Securities                 180      170     ---      7.3%
Regions Financial              202      180        6     7.2%
Santander Brasil               188      188     ---      7.3%
Scotiabank                     180     ---      ---      7.3%
SMBC Nikko Securities          240      230     ---      7.2%
Societe Generale               240      245     ---      7.1%
Southbay Research              146      136     ---      ---
Southern Polytechnic State     100       95     ---      7.4%
Standard Chartered Bank        165      177     ---      7.3%
Sterne Agee & Leach            150     ---      ---      7.3%
Stone McCarthy Research        190      180        5     7.3%
TD Securities                  182      182       10     7.3%
TrimTabs                       159     ---      ---      ---
UBS                            195      185     ---      7.2%
UniCredit Research             190     ---      ---      7.3%
Union Investment               175     ---      ---      7.3%
University of Maryland         164      154       10     7.3%
Wells Fargo & Co.              170     ---      ---      7.3%
Westpac Banking Co.            192     ---      ---      7.3%
Wrightson ICAP                 180      185     ---      7.3%
================================================================

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 in Washington at cwellisz@bloomberg.net


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Companies Mentioned

  • WMT
    (Wal-Mart Stores Inc)
    • $84.95 USD
    • -0.45
    • -0.53%
  • TGT
    (Target Corp)
    • $72.1 USD
    • 0.53
    • 0.74%
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