Wait - I thought the economy was supposed to be IMPROVING! Unemployment isn't supposed to rise... Can't we just HOPE it lower???
May 6, 2011
Employment in U.S. Probably Slowed in April as Companies Curbed Spending
By Timothy R. Homan
Bloomberg.com
The pace of hiring in the U.S. probably cooled in April as companies curbed spending in the face of rising raw-material costs, economists said ahead of a government report today.
Payrolls rose by 185,000 workers last month compared with a 216,000 advance in March, according to the median forecast of 86 economists surveyed by Bloomberg News. The jobless rate may have held at 8.8 percent.
The economic recovery that began in June 2009 may need to generate more jobs to ensure that consumers, whose spending accounts for 70 percent of the economy, will be able to weather rising fuel and food prices. An employment slowdown underscores why Federal Reserve policy makers last week decided to forge ahead with record monetary stimulus to bolster the expansion.
The current, “moderate” rate of job growth “is a pace that really wouldn’t do much for the unemployment rate,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “There’s a lot of slack in the economy, especially in the labor market. Higher gasoline prices have been a restraint in the near-term.”
The Labor Department’s jobs numbers are due at 8:30 a.m. in Washington. Bloomberg survey estimates range from payroll increases of 118,000 to 325,000.
Private payrolls, which exclude government positions, are forecast to rise by 200,000 following a 230,000 gain the previous month, according to the survey median. The projected April increase would be the smallest in three months.
Two-Year Low
The jobless rate dropped a percentage point over the four months ended March to reach 8.8 percent, the lowest level in two years. Estimates in the Bloomberg survey for April range from 8.6 percent to 9 percent.
While payrolls have grown each month since October, Fed Chairman Ben S. Bernanke said on April 27 that central bankers would like to see more strength in the U.S. labor market, noting that a recovery has been “quite slow.”
“The labor market is improving gradually,” Bernanke said to reporters during the first-ever press conference following a Federal Open Market Committee meeting. “We would like to make sure that that is sustainable. The longer it goes on, the more confident we are.”
Households may find it difficult to boost spending as they pay more for groceries and gas. The average price of regular gasoline was $3.99 a gallon on May 4, the highest since July 2008, according to AAA, the nation’s biggest motoring organization. Food costs rose 0.8 percent in March, also the most since July 2008, data from the Labor Department showed last month.
Stocks Retreat
Stocks have fallen over the past week on concerns that a slowdown in U.S. growth during the first three months of the year may be extending into the second quarter. The Standard & Poor’s 500 Index has declined 2.1 percent since April 29.
The S&P 500 Index (SPX) fell 0.9 percent yesterday, the most since April 18, after the biggest plunge in commodity prices since 2009. Cheap fuel prices would help ease the damage to consumer spending.
“If we get gasoline prices down, that should help consumer spending and in turn the job outlook,” said Raymond James’ Brown.
The economy expanded at a 1.8 percent annual pace in the first quarter, down from the 3.1 percent rate the previous three months, the Commerce Department said last week.
Growth Slowdown
Other economic measures are signaling a pause in the expansion. The Institute for Supply Management’s indexes of manufacturing and non-manufacturing companies both declined in April.
Some companies are still planning to add workers. “We are going to be hiring and growing employment in Puget Sound and in South Carolina over the foreseeable future,” Jim McNerney, chief executive officer of Boeing Co. (BA), said on an April 27 teleconference. “Production rates are fueling really an unprecedented growth for commercial airplanes.”
Manufacturing employment is forecast to rise by 20,000 in April after a 17,000 increase a month earlier, according to the Bloomberg survey. In January, factory payrolls rose 53,000.
Bloomberg Survey
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Nonfarm Private Manu Unemploy
Payrolls Payrolls Payrolls Rate
,000’s ,000’s ,000’s %
==============================================================
Date of Release 05/06 05/06 05/06 05/06
Observation Period April April April April
--------------------------------------------------------------
Median 185 200 20 8.8%
Average 187 203 20 8.8%
High Forecast 325 350 40 9.0%
Low Forecast 118 161 5 8.6%
Number of Participants 86 37 20 80
Previous 216 230 17 8.8%
--------------------------------------------------------------
4CAST Ltd. 160 180 --- 8.8%
ABN Amro 180 200 --- 8.8%
Action Economics 185 --- 15 8.8%
Aletti Gestielle 195 228 20 8.8%
Ameriprise Financial 195 185 25 8.9%
Banesto 200 --- --- ---
Bank of Tokyo- Mitsubishi 118 --- 18 8.8%
Bantleon Bank AG 170 --- --- 8.9%
Barclays Capital 210 225 --- 8.7%
Bayerische Landesbank 185 --- --- 8.8%
BBVA 185 200 --- 8.8%
BMO Capital Markets 180 --- --- 8.8%
BNP Paribas 140 --- --- 8.8%
BofA Merrill Lynch 175 190 --- 8.8%
Briefing.com 175 200 --- 8.9%
Capital Economics 175 --- --- 8.8%
CIBC World Markets 185 --- --- 8.8%
Citi 160 180 20 8.9%
ClearView Economics 220 240 20 8.8%
Commerzbank AG 220 --- --- 8.8%
Credit Agricole CIB 185 --- --- 8.8%
Credit Suisse 150 165 --- 8.8%
Daiwa Securities America 180 --- --- ---
DekaBank 190 --- --- 8.9%
Desjardins Group 180 --- --- 8.9%
Deutsche Bank Securities 200 --- --- 8.7%
Deutsche Postbank AG 180 --- --- 8.8%
DZ Bank 180 --- --- 8.8%
Fact & Opinion Economics 235 --- --- 8.8%
First Trust Advisors 190 210 25 8.8%
FTN Financial 200 --- --- 8.8%
Goldman, Sachs & Co. 175 --- --- 8.8%
Helaba 210 --- --- 8.8%
High Frequency Economics 180 --- --- 8.7%
HSBC Markets 220 --- --- 8.8%
Hugh Johnson Advisors 180 --- 15 8.9%
Ibersecurities 187 --- --- ---
IDEAglobal 225 245 25 8.8%
IHS Global Insight 185 --- --- 8.8%
Informa Global Markets 185 --- 20 8.8%
ING Financial Markets 170 190 40 8.7%
Insight Economics 225 --- --- 8.9%
Intesa-SanPaulo 200 --- --- 8.8%
ITG Investment Research 160 175 --- ---
J.P. Morgan Chase 165 180 5 8.8%
Janney Montgomery Scott 189 202 17 8.8%
Jefferies & Co. 150 165 25 8.7%
Landesbank Berlin 200 --- --- 8.9%
Landesbank BW 215 --- --- 8.7%
Laurentian Bank 200 210 --- 8.8%
Maria Fiorini Ramirez 180 195 --- 8.8%
MET Capital Advisors 200 --- --- 8.8%
MF Global 250 270 10 8.8%
Mizuho Securities 175 --- --- 8.7%
Moody’s Analytics 145 170 --- 8.8%
Morgan Keegan & Co. 196 --- --- 8.8%
Morgan Stanley & Co. 160 175 --- 8.9%
National Bank Financial 190 --- --- 8.8%
Natixis 190 --- --- 8.8%
Nomura Securities 150 --- --- 8.8%
Nord/LB 210 210 25 8.8%
OSK Group/DMG 185 --- --- 8.7%
Paragon Research 175 --- --- 8.8%
Parthenon Group 137 --- --- 8.8%
Pierpont Securities 225 --- --- 8.8%
PineBridge Investments 225 --- --- 8.8%
PNC Bank 210 --- 10 8.9%
Prestige Economics 200 225 --- 8.8%
Raiffeisenbank International 210 220 --- 8.8%
Raymond James 170 195 --- 8.7%
RBC Capital Markets 178 190 --- 8.7%
RBS Securities 240 250 --- 8.8%
Scotia Capital 170 --- --- 8.8%
Societe Generale 325 350 --- 8.6%
Standard Chartered 135 175 --- ---
State Street Global Markets 152 161 16 8.9%
Stone & McCarthy Research 150 165 20 8.7%
TD Securities 170 185 --- 8.9%
TF Market Advisors 160 --- --- ---
UBS 175 200 --- 8.7%
UniCredit Research 190 --- --- 8.9%
University of Maryland 180 200 20 8.7%
Wells Fargo & Co. 165 --- --- 8.7%
WestLB AG 200 --- --- 8.7%
Westpac Banking Co. 170 --- --- 9.0%
Wrightson ICAP 200 220 --- 8.9%
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Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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