Tags: economy | data | jobs | labor

Economists: Hiring Probably Stagnated in September

Sunday, 02 October 2011 07:12 PM

U.S. employment gains in September were probably too small to reduce joblessness and manufacturing almost stalled as concern mounted that the global recovery was losing momentum, economists said before reports this week.

Employment climbed by 50,000 workers after no change in August, according to the median forecast of 67 economists surveyed by Bloomberg News before Labor Department data Oct. 7. Factories grew at the slowest pace since July 2009, a survey of purchasing managers may show tomorrow.

The European debt crisis, political haggling in the U.S. and a plunge in 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 spur the expansion.

“The first things employers tend to do when the outlook weakens is they stop hiring,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “A lot of indicators are suggesting further weakening in the labor market.”

The unemployment rate was 9.1 percent in September for a third month, according to the survey median.

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.

Verizon, Minnesota

While a labor dispute at Verizon Communications Inc. depressed employment in August, its resolution may have added about 45,000 workers back to payrolls last month, according to economists like John Herrmann at State Street Global Markets in Boston.

Conversely, the return of state government workers in Minnesota 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 the year, 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.

Manufacturing, a stalwart of the expansion, barely grew last month, a report may show Oct. 3. The Institute for Supply Management’s factory index fell to 50.3 from 50.6 in August, according to a Bloomberg survey of economists. A reading of 50 is the dividing line between contraction and expansion.

Orders Stall

A Commerce Department report the following day may show factory orders were little changed in August after a 2.4 percent gain the prior month, according to economists surveyed by Bloomberg.

Services, which make up about 90 percent of the economy, probably also slowed last month, another report may show on Oct. 5. ISM’s non-manufacturing index fell to 52.8 from 53.3 in August, according to a Bloomberg survey of economists.

The projected gain in total payrolls would bring the average from July through September to 45,000, down from 97,000 in the second quarter and 166,000 in the first three months of the year.

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.

Fed’s View

“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.

Investors have turned more pessimistic. The Standard & Poor’s 500 Index had its biggest quarterly drop from July through September since 2008.

Illinois and New York are among states that are bracing for job cuts to avoid partial government shutdowns. Illinois will have to lay off more than 1,900 state employees and close seven facilities to avoid a partial government shutdown next spring, Democratic Governor Pat Quinn said Sept. 9.

Citigroup Inc., the third-biggest U.S. bank, is among firms that have turned more cautious about hiring. It said last month it will limit hiring to only “critical” jobs as the economic slowdown continues and revenue slumps.

“We are currently only filling positions we believe are critical to the line of business or function,” Shannon Bell, a spokeswoman for the New York-based bank, said in an interview Sept. 15.

© Copyright 2021 Bloomberg News. All rights reserved.

1Like our page
U.S. employment gains in September were probably too small to reduce joblessness and manufacturing almost stalled as concern mounted that the global recovery was losing momentum, economists said before reports this week.Employment climbed by 50,000 workers after no change...
Sunday, 02 October 2011 07:12 PM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved