BLBG: Payrolls Probably Rose for Fifth Month, Led By U.S. Census Jobs
By Shobhana Chandra
June 4 (Bloomberg) -- Employers added jobs in May for the fifth consecutive month, providing U.S. households with the incomes needed to maintain spending and the economic recovery, economists said before a report today.
Payrolls rose by 536,000, the most since 1983, according to the median forecast of 82 economists surveyed by Bloomberg News. The gain reflects a jump in government hiring of temporary help for the census and a 180,000 rise in private employment, the survey showed. Economists also project the jobless rate fell.
Improving sales are prompting companies from Lowe’s Cos. to General Electric Co. to boost staff, starting a virtuous circle of hiring and spending that will keep the economy growing after government help wanes. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.
“As sales increase, there’s just no way companies can operate without adding workers after having cut payrolls so deeply last year,” said Chris Low, chief economist at FTN Financial in New York. “It means stronger consumer spending and stronger economic growth. The economy should be able to carry on its own without the stimulus.”
The Labor Department’s report is due at 8:30 a.m. Washington time. Survey estimates for the gain in payrolls ranged from 220,000 to 750,000.
The projected jump in employment would be the biggest since a 1.11 million surge in September 1983, which reflected the return of about 640,000 striking workers to AT&T Inc.’s payroll.
Jobless Rate
Economists surveyed also forecast the jobless rate fell to 9.8 percent last month from 9.9 percent in April. Unemployment, which reached a 26-year high of 10.1 percent in October, may take time to recede as the number of jobseekers reentering the labor force exceeds the number of positions available.
Federal hiring of temporary workers to conduct the decennial population count probably peaked last month, economists said. Figures from the Labor Department show there were about 417,000 more census workers on government payrolls during the employment survey week, which includes the 12th of the month, than in the same period in April.
The unwinding of census employment may keep distorting the payroll figures for months as the government dismisses workers when the count is completed. For that reason, economists say private payrolls, which exclude government jobs, will be a better gauge of the state of the labor market for much of 2010.
Private Payrolls
The projected gain in private payrolls would follow an increase of 231,000 in April. Excluding government jobs, employment climbed by 116,000 a month on average in the five years to December 2007, when the recession began.
Manufacturing payrolls increased by 33,000 in May, the survey showed, a fifth straight gain.
Fairfield, Connecticut-based General Electric, the world’s largest maker of jet engines, power-generation equipment and locomotives, said last month it will increase the number of jobs it plans to add in Michigan to more than 1,300.
The U.S. economy right now is “very good and improving,” GE’s Chief Executive Officer Jeffrey Immelt said in a May 24 interview. Europe’s debt crisis is “solvable” and will not slow the global economic recovery, he said.
Automaker Chrysler Group LLC, controlled by Fiat SpA and based in Auburn Hills, Michigan, will hire 1,100 workers at a Detroit factory that produces Jeep Grand Cherokees and add a second shift.
Reviving Sales
The pickup in jobs is spreading beyond factories. Lowe’s, the second-largest U.S. home improvement retailer, is adding more than 1,400 positions for employees to visit customers’ homes to sell products such as windows and doors. Mooresville, North Carolina-based Lowe’s will fill the jobs internally and hire new workers to try to revive sales.
Concern that the rebound will slow because of fallout from the turmoil in Europe and cooling growth in China has caused the Standard & Poor’s 500 Index to drop 9.4 percent from a 19-month high reached on April 23.
Bernanke yesterday said joblessness is among the “important concerns” for the recovery.
“One particularly difficult issue is the continued high rate of unemployment,” Bernanke said at a forum at the Chicago Fed’s Detroit office. “High unemployment imposes heavy costs on workers and their families, as well as on our society as a whole.”
Some companies are still cutting back. Hewlett-Packard Co., the world’s largest personal-computer maker based in Palo Alto, California, this week said it’ll slash about 3,000 jobs over several years. Citigroup Inc. plans to close 376 branches and reduce as many as 720 jobs in the U.S. and Canada.
