Companies powered the U.S. job market past a milestone in March as private employment exceeded the pre-recession peak for the first time, showing the kind of progress Federal Reserve officials look for to maintain their current policy course.
Payrolls excluding government agencies rose by 192,000 workers after a 188,000 gain in February that was larger than first estimated, the Labor Department reported today in Washington. That brought the job count to 116.1 million, beating the January 2008 high of 116 million. The jobless rate held at 6.7 percent even as almost half a million people entered the workforce.
Retailers, construction companies and health-care providers were among those taking on additional staff as the world’s largest economy shook off the effects of harsh winter weather that curbed growth at the start of the year. The data mean the central bank will probably keep trimming stimulus at a measured rate and that interest rate increases remain far on the horizon.
“The Fed doesn’t need to do anything at this point, it’s in a bit of a sweet spot,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, and the top payrolls forecaster in the last two years, according to data compiled by Bloomberg. “Growth looks like it’s back on track. Equally good news is that inflation is not a threat right now.”
Stocks fell, dragged down by a slump in technology shares, after benchmark indexes had climbed to records following the jobs report. The Standard & Poor’s 500 Index declined 1.3 percent to 1,865.09 at the close in New York.
The agency’s survey of households, used to calculate the jobless rate, showed 503,000 people entered the labor force and almost as many found work. The participation rate, which indicates the share of working-age people in the labor force, increased to 63.2 percent from 63 percent a month earlier.
By another metric, the improvement is even more dramatic. The number of people employed as a share of the working-age population increased to 58.9 percent, the highest since August 2009.
Private jobs accounted for all the growth in employment last month as government agencies showed no change in hiring. The gain in total payrolls followed a larger-than-previously reported increase of 197,000 in February. Revisions added 37,000 jobs to the previous two months.
The median forecast in a Bloomberg survey of 90 economists projected a 200,000 advance. Forecasts ranged from increases of 150,000 to 275,000 after a previously reported 175,000 gain a month earlier. Last year, the U.S. added 194,000 jobs each month on average after 186,000 in 2012.
The number of discouraged workers dropped to 698,000, the fewest since March 2009. The figures also showed an increase in the number of people employed part-time.
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.”
At the conclusion of a two-day meeting in March, Fed policymakers repeated the central bank will reduce asset purchases “in further measured steps at future meetings” after trimming the pace of its monthly bond-buying program by $10 billion to $55 billion.
Faster employment growth would help stoke wage gains and embolden households, whose spending accounts for almost 70 percent of the economy. The report showed hourly earnings were little changed at $24.30 on average compared with $24.31 in February. They were up 2.1 percent over the past 12 months after increasing 2.2 percent in the year ended February.
After Courtney Smith survived two rounds of firings at a food sales and marketing company, she began looking for a job with more security.
It took a year and dozens of interviews before Smith, 33, joined Boston-based Flashnotes.com, a marketplace where college students can buy and sell class notes and study guides. She started work March 5 as a campus recruitment coordinator for the start-up, which recently won $3.6 million in new funding.
“I was lucky enough to be employed while looking,” said Smith. “People who are working can find other jobs, but I think when they’re unemployed it’s still really, really hard.” Many friends who were let go from her last employer 10 months ago still haven’t found work, she said.
Accounting firm Ernst & Young LLP plans to increase hiring this year by almost 22 percent, said Dan Black, director of recruiting for the Americas. The New York-based company will recruit 12,700 employees. Of those, 7,200 will be recent college graduates.
“Not only are we back to pre-recession level, this is the largest number of hires we’ve ever made in the United States,” Black said. “When you see growth like that, for me, and for us, that’s an indicator of something positive. We’re seeing a lot of demand here.”
Including government agencies, the U.S. has recovered all but 437,000 of the 8.7 million jobs lost as a result of the last recession.
Construction companies boosted employment by 19,000 workers and retail payrolls rebounded 21,300. The number of temporary workers jumped 28,500 and education and health care added another 34,000.
Recent data have pointed to a thaw in the economy and the labor market as temperatures began to warm. A report yesterday showed service industries, which account for almost 90 percent of the economy, improved and more companies said they were adding to headcount.
Ford Motor Co., 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 in March, the strongest since May 2007, according to Ward’s Automotive Group.
Such demand helps explain why automakers are planning on increasing headcounts. 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.
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