Gain in U.S. Payrolls May Not Cut Jobless Rate
Job seekers wait in line outside of a job fair at the Park Ridge Community Center in Park Ridge, Illinois, U.S. The jobless rate was 9.1 percent for a third consecutive month, according to the forecasts. Photographer: Tim Boyle/Bloomberg
Oct. 7 (Bloomberg) — James Shugg, a senior economist at Westpac Banking Corp., discusses the U.S. economy and the outlook for today's September non-farm payrolls report. He talks with Francine Lacqua on Bloomberg Television's «The Pulse.» (Source: Bloomberg)
Oct. 7 (Bloomberg) — Sarah Hewin, senior economist at Standard Chartered Plc, discusses Bank of England and European Central Bank monetary policy and the outlook for today's U.S. September non-farm payrolls report. She speaks with Linzie Janis on Bloomberg Television's «Countdown.» (Source: Bloomberg
A projected gain in U.S. payrolls in September was probably too small to bring down the unemployment rate as concern mounted that the global recovery was losing momentum, economists said before a report today.
Employment climbed by 55,000 workers after no change in August, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate was 9.1 percent for a third consecutive month, according to the forecasts.
The debt crisis in Europe
, political gridlock in the U.S. and plunging stock prices have led to a drop in consumer and business confidence that may keep hurting spending and hiring. The risk that the world’s largest economy may fall back into a recession has prompted the Federal Reserve
and President Barack Obama to announce further measures to sustain the expansion.
“Businesses remain reluctant to add workers,” said Ryan Sweet
, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania
. “Much of the weakness in hiring can be blamed on uncertainty.”
Unemployment has exceeded 8 percent since February 2009, the longest stretch of such elevated joblessness since monthly records began in 1948.
Private payrolls, which exclude government jobs, rose 90,000 after a gain of 17,000 in the prior month, economists forecast the employment report will also show.
While a labor dispute at Verizon Communications Inc. (VZ)
depressed employment in August, its resolution may have added about 45,000 workers back to payrolls last month, according to John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston
Conversely, the return of state government workers inMinnesota
lifted the August payroll count by 23,000, a boost that wasn’t repeated last month.
The economy expanded at a 1.3 percent pace in the second quarter following a 0.4 percent gain in the first three months of 2011, the weakest performance in two years, the Commerce Department reported last week. Consumer spending
grew 0.7 percent, the least since the last three months of 2009.
Jan Hatzius, chief economist at Goldman Sachs Group Inc. inNew York
, says the odds of a renewed U.S. recession are rising as confidence and spending have slumped. This week he said he saw a 40 percent chance the U.S. would slip back into a recession over the next year.
, chief economist for North America
at BNP Paribas in New York, forecasts a “mild recession.”
The projected gain in total payrolls would bring the average from July through September to 47,000, down from 97,000 in the second quarter and 166,000 in the first three months of the year.
200,000 a Month
Sustained increases of around 200,000 a month are needed to bring unemployment down about a percentage point over a year, according to Eric Green
, chief market economist at TD Securities Inc. in New York.
Through August, the economy had recovered about 1.9 million of the 8.75 million jobs lost as a result of the 18-month recession that ended in June 2009.
“Economic growth remains slow,” Fed policy makers said Sept. 21 as they announced a plan to bring down longer-term lending rates. While officials said they “expect some pickup in the pace of recovery over coming quarters,” they anticipate“the unemployment rate
will decline only gradually.”
Obama last month proposed a $447 billion jobs plan that economists surveyed by Bloomberg forecast would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year.