Oct. 3 (Bloomberg) -- The U.S. jobless rate declined to a six-year low
of 5.9 percent in September and employers in the U.S. added more workers
than projected.
The 248,000 gain in payrolls followed a 180,000 August increase
that was bigger than previously estimated, the Labor Department reported
in Washington. Peter Cook reports on Bloomberg Television's "In the
Loop." (Source: Bloomberg)
A surprisingly powerful surge in hiring pushed unemployment to a
six-year low of 5.9 percent in September as the U.S. labor market showed
renewed vigor.
The 248,000 gain in payrolls followed a 180,000
increase in August that was bigger than previously estimated, the Labor
Department reported in Washington. Revisions boosted the job count by
69,000 over the previous two months. The jobless rate fell from 6.1 percent to the lowest level since July 2008.
“This report was strong across the board,” said Dean Maki,
chief U.S. economist at Barclays Plc in New York and the top payrolls
forecaster over the past two years, according to data compiled by
Bloomberg. “The labor market continues to grow fast enough to keep
pushing the unemployment rate down.”
The
pickup in hiring shows employers are gaining confidence the expansion
in the world’s biggest economy will be sustained, surviving slowdowns in
Europe and Asia that have hurt global stock markets. Stagnant wage
growth kept the report from being universally upbeat, giving Federal
Reserve policy makers reason to be patient in removing monetary
stimulus.
“It’s great to have the headline job growth number, but there’s still slack,” said Richard Moody,
chief economist at Regions Financial Corp. in Birmingham, Alabama. The
wage reading “fits right into how the Fed sees things -- we’re making
progress but there’s still a long way to go.”
Photographer: Luke Sharrett/Bloomberg
Construction companies added 16,000 workers for a second month.
Stocks rallied, paring a second straight weekly loss in the
Standard & Poor’s 500 Index, as the jobs report boosted confidence
in the U.S. economy. The S&P 500 rose 1.1 percent to 1,967.9 at the
close in New York. The dollar, based on the Bloomberg Dollar Spot Index, climbed to a four-year high.
Survey Results
The
median forecast of 100 economists surveyed by Bloomberg projected
payrolls would increase by 215,000. Estimates ranged from 155,000 to
265,000 after a previously reported 142,000 advance.
The drop in
unemployment was the biggest surprise, exceeding all forecasts. The
rate, which is derived from a Labor Department survey of households, was
projected to hold at 6.1 percent, according to the Bloomberg survey median. Estimates ranged from 6 percent to 6.2 percent.
Among those recently hired workers is Naveed Siddiqui, who
interned at Textron Inc., a manufacturing conglomerate whose brands
include Bell Helicopter and Cessna aircraft. When the internship ended
last summer, Textron offered Siddiqui, 21, a full-time job after
graduation from the University of Maryland. He started in late July.
Photographer: Andrew Harrer/Bloomberg
A contractor works on a retail and apartment building under construction in Washington, D.C.
Finding Work
“It was a big weight lifted off my
shoulders,” Siddiqui said. “I could focus on getting set for graduation.
There was no really big job hunt.”
One sign of weakness in
today’s report was average hourly earnings, which were unchanged in
September, the worst reading since April. Pay was up 2 percent over the
past 12 months, down from 2.1 percent in August.
“Of 38 pages of
numbers, that’s the number that the Fed is going to be focused on the
most, that zero for average hourly earnings growth,” said Moody. “It
goes to the Fed’s point that there’s still a lot of slack in the labor
market.”
The underemployment rate, a gauge that counts the
unemployed, workers settling for part-time jobs and people who have
given up the search, fell to 11.8 percent in September, or twice as high
as the official jobless reading, from 12 percent a month earlier. The
gap indicates the headline number continues to understate the amount of
slack.
Yellen’s View
“There are still too many people
who want jobs but cannot find them, too many who are working part-time
but would prefer full-time work,” Fed Chair Janet Yellen
said during a Sept. 17 press conference in Washington after the central
bank’s last policy meeting. That “significant underutilization of labor
resources” is keeping a lid on wages, she said.
Policy makers
in September stuck to their pledge to keep interest rates near zero for a
“considerable time” after the Fed stops buying assets. The Fed tapered
monthly bond buying to $15 billion in their seventh consecutive $10
billion cut, staying on course to end the purchase program this month.
Drew
Brown, 62, is among the underemployed after being let go from her job
as a science editor in November 2009. Despite decades of experience and a
master’s degree in biological oceanography, jobs in her field were hard
to come by. Last summer, she took part-time work as a driver at a car
rental lot near Baltimore.
Underemployed Worker
While
the work is “pleasant,” she said, “the commute is long and the pay is
low.” Brown is still searching for work in environmental biology or
microbiology, something that pays a “livable wage.” Until then, she’d
like more hours.
The stronger-than-expected increase in hiring last month reflected a pickup at grocery stores, factories and restaurants.
Automakers
boosted hiring by 3,300 in September after a 4,500 drop in August that
may have reflected the timing of plant shutdowns to retool for the new
model year. Employment at food and beverage stores rebounded by 19,500
after a decline in August, when workers walked off the job at a New
England grocer.
Vince Newendorp, vice president at Vermeer Corp.
in Pella, Iowa, said that business has been “very strong.” That’s
prompted the company to keep hiring.
Head count “will be steady
or up a bit, going into next year,” Newendorp said, adding that the
machine manufacturer is shifting hiring toward jobs that require more
technical know-how. “We have created manufacturing jobs that pay more.”
Trade Gap
Another report today showed the U.S. trade deficit
shrank in August to the lowest level in seven months as exports edged
up to a record. The gap decreased 0.5 percent to $40.1 billion, the
smallest since January, from $40.3 billion in July, the Commerce
Department reported.
The narrowing deficit prompted economists
at Barclays PLC in New York to boost their tracking estimate of
third-quarter gross domestic product to a 3.3 percent gain at an
annualized rate from 2.7 percent.
Also today, another report
showed service industries grew in September to cap the strongest quarter
of expansion in more than 10 years. While the Institute for Supply
Management’s non-manufacturing index
fell to 58.6 from the prior month’s 59.6, the third-quarter average was
the highest since the first three months of 2004, the Tempe,
Arizona-based group said.
The quarterly average for the group’s factory index was the highest since early 2011, a report showed earlier this week.
“We’re seeing continued momentum from the incoming U.S. economic data,” Emily Kolinski Morris,
chief economist at Ford Motor Co., said on an Oct. 1 sales call.
“Favorable indicators include continued robust manufacturing activity,
growth in investment spending, gradually improving employment conditions
with modest income growth, and stabilizing and potential modest gains
in housing.”
“While there are still shortcomings in the labor market, conditions have continued to improve gradually,” she said.
To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net
To contact the editors responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle
Lightly Armed Kurds Face Terrorist Tanks, Feel 'Deserted and Furious' at U.S.
Among those recently hired workers is Naveed Siddiqui, who
interned at Textron Inc., a manufacturing conglomerate whose brands
include Bell Helicopter and Cessna aircraft. When the internship ended
last summer, Textron offered Siddiqui, 21, a full-time job after
graduation from the University of Maryland. He started in late July. 
No comments:
Post a Comment
Please leave a comment-- or suggestions, particularly of topics and places you'd like to see covered