Payrolls Probably Rebounded as U.S. Economy, Weather Improved
Friday, March 4, 2011; 12:46 AM
Employment increased by 196,000 workers last month, the most since May, after a 36,000 gain in January, when winter storms depressed the count, according to the median forecast of 84 economists surveyed by Bloomberg News. The report may also show the jobless rate increased to 9.1 percent from 9 percent.
Bigger, sustained monthly payroll gains would underscore Federal Reserve Chairman Ben S. Bernanke's testimony to Congress this week that there are "grounds for optimism" about the labor market in coming months. Employment growth and the resulting increases in income and confidence are contributing to sales improvements at companies like J.C. Penney Co. and Macy's Inc.
"The labor market has passed an important threshold and is starting to create a good number of jobs," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "It's partly a snow-related rebound, but I think there's some real substance there. We're looking for jobs to run 200,000 plus in coming months as the recovery reaches the self- sustainable stage."
The Labor Department figures are due at 8:30 a.m. in Washington. Bloomberg payroll survey forecasts ranged from gains of 100,000 to 297,000.
Nationwide, temperatures during the week of the February employment survey were near normal, except for the central and southern Great Plains, according to National Weather Service. In contrast, economists said a storm that spread from the Midwest and the South to New England during the prior month's survey week likely depressed January numbers as businesses temporarily closed.
The bad weather reduced January payrolls by about 100,000 workers, said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pennsylvania. He said those jobs are likely to be captured in the February payrolls report.
Private payrolls, which exclude government workers, probably rose by 200,000 last month, the most since April, according to the Bloomberg survey. Companies added 50,000 workers in January, the smallest gain in eight months, the Labor Department said on Feb. 4.
The projected increase in the jobless rate would mean it has been 9 percent or higher for 22 consecutive months, the longest stretch at such elevated levels since monthly records began in 1948. At the same time, the rate has dropped 0.8 percentage point over the past two months, the biggest decrease in such a short period since 1958.
The labor market "has improved only slowly" and it may take "several years" for the unemployment rate to reach a "more normal level," Bernanke said March 1 during testimony before the Senate Banking Committee.
Still, "we do see some grounds for optimism about the job market over the next few quarters, including notable declines in the unemployment rate in December and January, a drop in new claims for unemployment insurance, and an improvement in firms' hiring plans," Bernanke said.
President Barack Obama last week told the first meeting of his panel of outside economic advisers that the U.S. must deal with stubbornly high unemployment even as the recovery is well under way.
J.C. Penney, Macy's and Ross Stores Inc. were among retailers yesterday reporting February same-store sales that topped analysts' estimates. Purchases at stores open at least a year climbed 6.4 percent at J.C. Penney, 5.8 percent at Macy's and 3 percent at Ross, company data showed.
"We are encouraged by our solid start to the year," Michael Balmuth, chief executive officer of Pleasanton, California-based discounter Ross Stores, said in a statement. Even so, "the much more important March/April holiday selling period is still ahead."
Manufacturing remains a bulwark to the expansion. Orders to U.S. factories probably rose 2 percent in January, the most since September, economists said ahead of a report from the Commerce Department in Washington due at 10 a.m.
The jobs report will show factory employment climbed by 25,000 workers last month after a 49,000 gain in January, the biggest increase since August 1998, according to the Bloomberg survey median.
Shares of manufacturers in the past year have outperformed the broader market. The Standard & Poor's Machinery Index has increased 50 percent, compared with a 19 percent gain in the S&P 500 Index.
Job gains are broadening out to include retailers and manufacturers. Intel Corp., the world's largest chipmaker, and Home Depot Inc. are among U.S. companies that announced plans last month to hire thousands of new workers.