Share Business ExchangeTwitterFacebook| Email | Print | A A A By Timothy R. Homan
April 2 (Bloomberg) -- Employment in the U.S. increased in March by the most in three years and the unemployment rate held at 9.7 percent as companies gained confidence the economic recovery will be sustained.
Payrolls rose by 162,000 last month, less than anticipated, after a revised 14,000 decrease in February that was smaller than initially estimated, figures from the Labor Department in Washington showed today. The March increase included 48,000 temporary workers hired by the government to help conduct the 2010 census. Average hourly earnings fell and hours worked rose.
Caterpillar Inc. is among companies adding staff, indicating the recovery that began in the second half of 2009 is starting to foster the job gains needed to lift consumer spending and sustain the economic expansion. Nonetheless, unemployment may be slow to recede as formerly discouraged employees enter the labor force looking for work, signaling the Federal Reserve will keep interest rates low in coming months.
“Labor markets have shifted to expansion mode,” said Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. “Some of the increase was payback for weather but more encouraging is that the recovery in hiring is spreading quickly across industries. This was broad-based.”
Stock-index futures reversed losses and Treasury securities declined after the report. Futures on the Standard & Poor’s 500 Index expiring in June rose 0.2 percent to 1,176.4 at 8:55 a.m. in New York. The 10-year Treasury note fell, pushing up the yield to 3.92 percent from 3.87 percent late yesterday.
Private payrolls increased by 123,000 in March.
Economists’ Forecast
Overall payrolls were forecast to increase by 184,000, according to the median estimate of 83 economists surveyed by Bloomberg News. Estimates ranged from a decline of 40,000 to a gain of 360,000.
The jobless rate was projected to hold at 9.7 percent. Forecasts ranged from 9.5 percent to 9.9 percent. The unemployment rate was unchanged even as more people entered the workforce.
Average hourly earnings fell 0.1 percent in March, the first drop since comparable records began in 2006.
Part of the payroll gain last month likely reflected a rebound from the February blizzards that set seasonal snowfall records in cities including Washington and Philadelphia, shuttering some businesses during the week of the government survey. Any hiring that would have taken place that week is figured into the March job count instead.
Census Hiring
Hiring at the Census Bureau for the population count may have the biggest impact on payroll figures in April through June, when the bulk of the additions will take place. The program will then subtract from the job count the following months as employees are dismissed after the work is done.
The agency said it will take on 1.15 million temporary workers in the first half of the year to conduct the population count that occurs every 10 years.
For that reason, economists will be excluding workers on public payrolls for much of the rest of the year in gauging the state of the labor market.
Today’s report from the Labor Department showed that government payrolls increased by 39,000 in March. State and local governments reduced employment by 9,000 during the month, while the federal government added 48,000.
The average work week for all workers rose to 34 hours in March from 33.9 hours the prior month, when winter storms temporarily closed some businesses.
Underemployment Rises
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 16.9 percent from 16.8 percent.
The report also showed an increased in long-term unemployed Americans. The number of people unemployed for 27 weeks or more rose as a percentage of all jobless, to a record 44.1 percent.
Factory payrolls increased 17,000 in March after rising 6,000 in the prior month. The median forecast by economists in the Bloomberg survey called for a gain of 15,000.
Payrolls at builders rose 15,000 last month, the biggest gain since March 2007, after declining 59,000. Financial firms reduced payrolls by 21,000, after a 15,000 drop the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, added 121,000 workers after an increase of 33,000 in February. Private service providers added 82,000 workers to payrolls in March.
The number of temporary workers increased 40,000 in March. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff.
Data ‘More Positive’
“Recent economic data have really turned more positive, of course with the exception of housing and commercial construction markets,” Ellen Hughes-Cromwick, Ford Motor Co.’s chief economist, said yesterday on a analysts’ conference call from Dearborn, Michigan.
The Institute for Supply Management’s factory index, which rose in March to the highest level in more than five years, points to “a very broad-based recovery in that sector,” she said. Initial jobless claims “continue to fall in line with what we would consider to be likely job growth in coming months.”
One company adding to payrolls is Leggett & Platt Inc., the 127-year-old manufacturer. The Carthage, Missouri-based company has hired a few hundred employees this year to meet rising demand for its car-seat parts and home-furniture components, according to Chief Executive Officer David Haffner.
“Things are better,” Haffner, 57, said in a March 16 interview. “We are reluctant to get too optimistic too quickly, but things are relatively better.”
The economy grew at a 5.6 percent annual rate in the fourth quarter, the biggest gain in six years, according to data from the Commerce Department released last week.
Economists surveyed by Bloomberg last month projected the jobless rate will end the year at 9.5 percent as the economy expands 3 percent in 2010.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment