Bloomberg News

Employers Probably Boosted Pace of U.S. Hiring for Third Month

April 04, 2014

U.S. Hiring

Maurice Montier selects a lite of glass to be polished at the Maryland Glass and Mirror Co. facility in Baltimore, Maryland, U.S., on Thursday, March 27, 2014. Photographer: Andrew Harrer/Bloomberg

Employers in the U.S. picked up the pace of hiring in March for a third month as the economy began to emerge from a weather-related setback, economists project a report will show today.

Payrolls rose by 200,000 last month, the most since November, after a 175,000 gain in February, according to the median forecast of 90 economists surveyed by Bloomberg. The jobless rate may have fallen to 6.6 percent, matching the lowest level since October 2008.

The projected gain would be in line with average payroll growth over the past two years and shows companies are optimistic sales will rebound after winter storms slowed household spending and disrupted supply chains. Such progress would give the Federal Reserve further evidence that bad weather was at the root of a first-quarter slowdown.

“We put on some good job growth there for a while in the fall then things seemed to slow,” said Raymond Stone, managing director of Stone & McCarthy Research Associates in Princeton, New Jersey. Employment is “poised to pick up again.”

Monthly U.S. Jobs Report: A Story Told by Numbers

Payroll estimates in the Bloomberg survey before the Labor Department’s report at 8:30 a.m. in Washington ranged from increases of 150,000 to 275,000. Last year, the U.S. added 194,000 jobs each month on average after 186,000 in 2012.

Recent data have pointed to a thaw in the economy and the labor market as temperatures begin to warm. A report yesterday showed service industries, which account for almost 90 percent of the economy, improved in March and more companies said they were adding to headcount.

Services, Manufacturing

The Institute for Supply Management’s non-manufacturing index rose to 53.1 in March from a four-year low of 51.6 a month earlier. Readings greater than 50 signal expansion. The Tempe, Arizona-based ISM said its measure of employment increased by the most on record. The group’s factory index on April 1 accelerated, driven by gains in production and orders.

Ford Motor Co. (F:US), Chrysler LLC and General Motors Co. reported March sales that beat analysts’ estimates as consumers, whose confidence is at a six-year high, returned to auto showrooms.

Cars and light trucks sold at a 16.33 million annualized rate, the strongest since May 2007, according to Ward’s Automotive Group.

BMW Hiring

Such demand helps explain why automakers are planning on increasing staff. Bayerische Motoren Werke AG, last month said it would expand its factory in Spartanburg, South Carolina, creating 800 new jobs by 2016 and boosting production by 50 percent, to 450,000 cars a year. The $1 billion investment by the Munich-based automaker would make the plant one of the largest in the U.S.

“This corresponds to more than 30,000 jobs and $1.8 billion in labor income for South Carolina that would not exist otherwise,” Chief Executive Officer Norbert Reithofer said in a March 28 speech.

While the labor market is on the mend, part of the drop in the unemployment rate reflects people giving up the search for work. Federal aid to the long-term unemployed expired in December, pushing 1.3 million people off the benefit rolls and prompting some to leave the labor force.

Fed Chair Janet Yellen highlighted inconsistencies in labor-market data in a speech this week, saying that the recovery “still feels like a recession to many Americans.”

“The numbers of people who have been trying to find work for more than six months or more than a year are much higher today than they ever were since records began decades ago,” Yellen said at a conference in Chicago. “While there has been steady progress, there is also no doubt that the economy and the job market are not back to normal health.”

Since Recession

The U.S. has recovered all but 666,000 of the 8.7 million jobs lost as a result of the last recession. Still, 63 percent of working-age Americans were either employed or actively seeking work as of February, close to the lowest level since 1978 and a share that’s been declining since the recession.

“If we were at full employment this would be great, but we want to be making up ground lost in the recession,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida. “We’re improving, but you’re just back to where you were five or six years ago.”

Faster employment growth would help stoke wage gains and embolden households, whose spending accounts for almost 70 percent of the economy.

“Wage growth has been really soft,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The relationship between wage growth and consumer spending has been very strong. Consumers are spending only what they have in their pockets.”

Survey Results ===================================================== 4/3/2014 Nonfarm Private Unemploy Hourly Payrolls Payrolls Rate Earnings ,000’s ,000’s % MOM% ===================================================== Date of Release 04/04 04/04 04/04 04/04 Observation March March March March ----------------------------------------------------- Median 200 200 6.6% 0.2% Average 206 202 6.6% 0.1% High Forecast 275 275 6.7% 0.4% Low Forecast 150 140 6.5% 0.0% # of replies 90 46 83 50 Previous 175 162 6.7% 0.4% ----------------------------------------------------- 4CAST Ltd. 225 220 6.7% 0.0% ABN Amro Inc. 225 225 6.6% --- Action Economics 200 205 6.6% 0.1% Ameriprise Finan 180 180 6.6% 0.2% Banca Aletti & C 195 198 6.6% --- Bank of the West 195 --- 6.6% 0.2% Bank of Tokyo- M 200 --- 6.6% --- Banorte-IXE 185 --- 6.6% --- Bantleon Bank AG 200 --- 6.6% --- Barclays 225 225 6.6% 0.2% Bayerische Lande 220 --- 6.6% --- BBVA 220 --- 6.7% --- BMO Capital Mark 190 --- 6.6% 0.2% BNP Paribas 210 210 6.6% 0.0% BofA Merrill Lyn 230 220 6.7% 0.2% Capital Economic 200 --- 6.6% 0.2% CIBC World Marke 202 --- 6.6% 0.2% Citi 240 240 6.6% 0.1% CohnReznick 210 --- --- --- Comerica Inc 185 --- 6.6% --- Commerzbank AG 200 --- 6.6% --- Corporate Knight --- --- 6.6% --- Credit Agricole 225 --- 6.6% 0.2% Credit Suisse 180 175 6.6% 0.1% CTI Capital Inc 210 --- --- --- Daiwa Securities 180 --- 6.6% --- Danske Bank A/S 195 185 6.6% --- DekaBank 230 --- 6.6% 0.1% Desjardins Group 220 --- 6.7% 0.2% Deutsche Bank Se 275 275 6.5% 0.1% Dubuque Bank & T 206 --- 6.6% --- DZ Bank 210 --- 6.6% --- Fathom Financial 230 --- --- --- First Trust Advi 209 210 6.6% 0.1% FTN Financial 195 185 6.6% 0.2% Goldman, Sachs & 200 195 6.6% 0.1% Haitong Internat 205 193 6.6% 0.1% Helaba 225 --- 6.6% 0.1% High Frequency E 230 --- 6.6% 0.1% HSBC Markets 181 181 6.7% --- Hugh Johnson Adv 160 160 6.6% 0.2% IDEAglobal 200 205 6.6% 0.2% IHS Global Insig 185 --- 6.6% 0.3% Informa Global M 240 --- 6.6% 0.1% ING Financial Ma 195 205 6.6% 0.2% Intesa Sanpaolo 215 --- 6.6% 0.2% J.P. Morgan Chas 200 200 6.6% 0.1% Janney Montgomer 228 220 6.6% --- Jefferies LLC 250 245 6.6% 0.0% JP Morgan Asset 245 239 6.6% 0.1% Landesbank BW 220 --- 6.6% --- LinkUp 275 --- --- --- Lloyds Tsb Bank 210 205 6.6% 0.2% Maria Fiorini Ra 190 190 --- --- Market Securitie 215 --- 6.6% --- MET Capital Advi 160 155 6.6% --- Mizuho Securitie 175 --- 6.7% --- Moody’s Analytic 185 205 6.6% 0.2% Morgan Stanley 200 195 6.6% 0.2% National Bank Fi 190 --- 6.6% --- Nationwide Insur 239 --- 6.7% --- Natixis 180 180 6.7% 0.0% Nomura Securitie 195 190 6.6% --- Nord/LB 180 180 6.6% 0.2% OSK-DMG 195 --- 6.6% --- Oxford Economics 210 --- 6.6% --- Pantheon Macroec 250 --- 6.6% 0.0% Paragon Research 200 --- 6.5% --- Pierpont Securit 190 185 6.7% --- PineBridge Inves 200 --- 6.7% 0.2% PNC Bank 225 220 6.6% 0.2% Prestige Economi 180 --- 6.6% --- Raymond James 195 195 6.6% 0.2% RBC Capital Mark 170 175 6.6% --- RBS Securities I 220 220 6.7% 0.1% Regions Financia 266 257 6.6% 0.2% Scotiabank 210 --- 6.6% --- Societe Generale 275 270 6.6% 0.4% Southbay Researc 194 194 --- --- Southern Polytec 150 140 6.6% --- Standard Charter 175 175 6.6% 0.0% Sterne Agee & Le 150 --- 6.7% 0.2% Stone McCarthy R 165 170 6.6% 0.2% TD Securities 213 208 6.6% 0.2% TrimTabs Investm 210 --- --- --- UBS 250 --- 6.6% 0.2% UniCredit Resear 235 --- 6.6% --- University of Ma 197 202 6.6% 0.1% Wells Fargo & Co 198 --- 6.6% --- Westpac Banking 175 --- --- --- Wrightson ICAP 200 200 6.6% 0.0% =====================================================

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle


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