Tags: economy | jobs | employment | economic | data

Data Week: Employers Probably Hired Fewer Workers

Sunday, 29 May 2011 01:17 PM

Employers probably hired fewer workers in May and manufacturing cooled as the jump in fuel costs and the effects of Japan’s earthquake rippled through the U.S., economists said before reports this week.

The projected 185,000 gain in payrolls would follow a 244,000 April increase, according to the median forecast in a Bloomberg News survey before Labor Department figures June 3. Another report may show factories grew at the slowest pace in seven months.

Faster progress in the job market is needed to help consumers weather the increase in energy prices and lift spending, which accounts for 70 percent of the economy. At the same time, supply disruptions from Japan are restraining manufacturing, which led the U.S. out of the recession.

“High gasoline prices are damping the pace of hiring a bit,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “Manufacturing will expand at a more moderate pace. We’re talking about a slow patch in the economy.”

The Labor Department employment report will also show the jobless rate dropped to 8.9 percent in May, according to the survey median. The rate unexpectedly climbed in April for the first time in five months, rising to 9 percent from 8.8 percent.

Private payrolls, which exclude government agencies, grew by 210,000 after advancing by 268,000 the prior month, according to the survey median.

‘Stubbornly High’

Target Corp., the second-biggest U.S. discount retailer, posted first-quarter revenue that missed analysts’ projections as rising fuel prices curbed shopping.

“While the U.S. economy is showing some signs of improvement, we expect the recovery will continue to be slow and uneven, particularly for more moderate income households,” Gregg Steinhafel, Minneapolis-based Target’s chief executive officer and president, said on a May 18 conference call. “Unemployment remains stubbornly high.”

Manufacturing, which accounts for about 12 percent of the economy, will probably cool following its strongest showing in seven years. The Institute for Supply Management’s factory index fell to 57.6 this month, the lowest level since October, according to the survey median. Readings above 50 signal expansion and the measure exceeded 60 for four consecutive months through April, the best performance since 2004.

The data, due June 1, will reflect disruptions to the automobile industry due to a scarcity of parts after the earthquake in Japan. Economists predict the constraint will be short-lived as Japanese manufacturers make up for lost ground in the second half of the year.

Temporary Lull

General Motors Co. is among manufacturers looking beyond the temporary lull. The Detroit-based automakers said on May 10 that it will spend $2 billion and add or preserve 4,000 jobs at eight U.S. plants as it boosts production. Since then, GM has announced it’ll take on 2,500 workers in Detroit and add 110 jobs in Texas as part of the plan.

Economists project the Labor Department’s employment report will show factory payrolls increased by 13,000 in May after rising by 29,000 the prior month, temporarily restrained by the effects of the earthquake, according the survey median.

Service industries, which account for almost 90 percent of the economy as tracked by the Tempe, Arizona-based ISM, picked up last month, economists said. The group’s non-manufacturing gauge, due June 3, rose to 54 from 52.8 in April, according to the survey median. The index lost almost 7 points in March and April combined as fuel prices rose.

Housing Slump

Housing data this week may show the industry is struggling, economists in the Bloomberg survey predicted. The S&P/Case- Shiller index of property values in 20 cities, due May 31, likely fell in March from February, the ninth straight monthly drop on a seasonally adjusted basis. The Commerce Department may report on June 1 that construction spending rose at a slower pace in April, weighed down by homebuilding.

The news is being reflected in housing stocks. The Standard & Poor’s Supercomposite Homebuilding Index has climbed 3.3 percent this year, compared with a 5.8 percent advance in the broader S&P 500 Index.

Among other reports this week, the Conference Board’s index of consumer confidence rose in May to the highest level in three months, economists surveyed predicted. A retreat in gasoline costs from a three-year high, together with job gains, is helping lift Americans’ moods. The figures are due May 31.

© Copyright 2019 Bloomberg News. All rights reserved.

1Like our page
Employers probably hired fewer workers in May and manufacturing cooled as the jump in fuel costs and the effects of Japan s earthquake rippled through the U.S., economists said before reports this week.The projected 185,000 gain in payrolls would follow a 244,000 April...
Sunday, 29 May 2011 01:17 PM
Newsmax Media, Inc.

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