Goldman, Geithner Give Gloomy Jobs Forecast

Thursday, 01 Apr 2010 01:35 PM


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Goldman Sachs lowered its forecast for the March U.S. payrolls report to a gain of 200,000 jobs from its previous expectation of a 275,000 rise, Edward McKelvey, an economist with the firm, said Thursday.

The March payrolls report, due at 8:30 a.m. Friday, is seen as the biggest event on the monthly calendar of U.S. economic data and as the most comprehensive jobs reading because it includes both private and public sector employment.

Economists expect a rise of 190,000 in March payrolls, according to the median of responses in a Reuters poll, following a 36,000 drop in February. A gain would mark only the second time jobs have increased since the recession started in December 2007.

Before changing their forecast, Goldman had said in a research report there were downside risks to their projection.

In that note, they said hiring for the U.S. census could be as much as 50,000 below their baseline assumption of 125,000.

Wednesday's ADP Employer Services private sector employment report showed an unexpected fall of 23,000, raising further questions on the state of the U.S. labor market.

Another tricky issue is predicting how many workers might be added in March in an expected rebound from the effect of harsh winter weather in February, the research report added.

Meanwhile, Treasury Secretary Timothy Geithner said the unemployment rate, currently at 9.7 percent, will remain "unacceptably high" for some time to come.

"The unemployment rate is still terribly high and it's going to stay unacceptably high for a long period of time," Geithner said on NBC's "Today" Show.

"The economy's going to start creating jobs again," Geithner said. "The economy's growing now, that's the first step and with growth, jobs will come."

But it will take a long time to make up ground lost to the recession, he said.

Geithner said a regulatory overhaul working its way through Congress will ensure that the government will not have to rescue the financial-services industry again.

"The president is not going to sign a bill that doesn't have strong enough teeth," he said.

Geithner also said industry leaders should not be paid in a way that encourages them to take reckless risks.

"What happened in our country should never happen again," he said.

"This is a job for governments, to do a better job of constraining that kind of risk-taking," he said.

© 2014 Thomson/Reuters. All rights reserved.

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