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U.S. Payrolls Rose 180,000 in March; Jobless Rate at 4.4%
By Joe Richter
April 6 (Bloomberg) -- Hiring in the U.S. rose more than forecast and the jobless rate unexpectedly dropped, giving the economy a spark as it struggles to overcome slumps in housing and manufacturing.
The 180,000 increase in employment followed a 113,000 gain in February that was larger than previously estimated, the Labor Department reported today in Washington. The jobless rate fell to 4.4 percent, matching October's five-year low.
New jobs and bigger paychecks are giving more Americans the means to spend, preventing the housing recession from spreading to the rest of the economy. The drop in the jobless rate may concern Federal Reserve policy makers who've said the threat of inflation is a bigger risk for the expansion.
``Jobs are plentiful and employers are giving fairly large wage increases,'' Robert Gay, managing director at Fenwick Advisers LLC in Rye, New York, and a former Fed economist, said before the report. ``Outside housing and manufacturing, the rest of the economy is doing pretty well and continuing to create jobs.''
Economists projected payrolls would rise by 130,000 following a previously reported 97,000 February increase, according to the median of 75 forecasts in a Bloomberg News survey. They also anticipated an increase in the unemployment rate to 4.6 percent.
Revisions for the previous two months showed employers added 32,000 more jobs than the Labor Department had earlier estimated.
Earnings
Workers' average hourly earnings rose 6 cents, or 0.3 percent, after a 0.4 percent increase the previous month. Economists expected a 0.3 percent increase in hourly wages. Earnings were up 4 percent from March last year.
``There's not a lot of deterioration in the labor market, despite the worries over the effects of the housing market,'' Michelle Girard, senior economist at RBS Greenwich Capital in Greenwich, Connecticut, said before the report. ``The fact that the labor market is still tight means the hurdle for Fed easing rates is higher than a lot of people might think.''
Builders added 56,000 jobs after shedding 61,000 the prior month. The snap back is probably due to the return of more seasonable temperatures after cold weather played a role in the February drop, the Labor Department said.
Service industries, which include banking, insurance, restaurants and retailers, gained 137,000 workers last month after a 180,000 gain in February, the report showed. The increase was led by a 36,000 gain in retail employment that was the biggest since July 2005.
Manufacturing
Manufacturers' payrolls fell 16,000 last month after dropping 11,000 a month earlier. Economists expected manufacturers to eliminate 12,000 positions. The manufacturing workweek rose to 41.1 hours and overtime increased to 4.3 hours from 4.2 hours.
Average weekly hours worked by production workers increased to 33.9 from 33.8. Economists in the Bloomberg survey had forecast hours would rise to 33.8 from 33.7.
Average weekly earnings rose to $583.76 last month from $580.01 in February.
``We continue to see modest growth and stability in the labor market,'' Steve Pogorzelski president of Monster International Worldwide, said in an interview on April 4. ``Employers continue to report they're concerned about turnover, driven by opportunities to make more money'' in other jobs.
The report is in line with others in recent weeks that suggested the labor market was holding up.
Other Surveys
ADP Employer Services said companies added 106,000 jobs last month after a 65,000 gain in February. The ADP data are based only on a count of private payrolls that exclude government workers.
A Conference Board survey released last week showed the share of Americans who said jobs are plentiful rose last month to the highest since August 2001. First-time claims for unemployment benefits also showed companies are holding on to workers.
``It's hard to find enough people to grow the way we want,'' said John Milligan, chief operating officer of Foster City, California-based Gilead Sciences Inc., the world's second-biggest seller of HIV drugs behind GlaxoSmithKline Plc, in an interview last month.
Other businesses are trying to trim costs by reducing staff. Milpitas, California-based Solectron Corp., the world's second- largest maker of electronics for other companies, said last week it may cut as many as 1,500 jobs as it consolidates facilities in North America and Europe.
Fed
Federal Reserve policy makers were counting on jobs and wages to keep consumers and the economy afloat.
``The continuing increases in employment, together with some pickup in real wages, have helped sustain consumer spending,'' Fed Chairman Ben S. Bernanke said during Congressional testimony last week. ``Growth in consumer spending should continue to support the economic expansion in coming quarters.''
Bernanke also said interest-rate policy was still aimed at combating inflation, which central bankers considered a bigger risk to the economy. Still, ``uncertainties have risen, and therefore a little more flexibility might be desirable.''
U.S. Payrolls Rose 180,000 in March; Jobless Rate at 4.4%
By Joe Richter
April 6 (Bloomberg) -- Hiring in the U.S. rose more than forecast and the jobless rate unexpectedly dropped, giving the economy a spark as it struggles to overcome slumps in housing and manufacturing.
The 180,000 increase in employment followed a 113,000 gain in February that was larger than previously estimated, the Labor Department reported today in Washington. The jobless rate fell to 4.4 percent, matching October's five-year low.
New jobs and bigger paychecks are giving more Americans the means to spend, preventing the housing recession from spreading to the rest of the economy. The drop in the jobless rate may concern Federal Reserve policy makers who've said the threat of inflation is a bigger risk for the expansion.
``Jobs are plentiful and employers are giving fairly large wage increases,'' Robert Gay, managing director at Fenwick Advisers LLC in Rye, New York, and a former Fed economist, said before the report. ``Outside housing and manufacturing, the rest of the economy is doing pretty well and continuing to create jobs.''
Economists projected payrolls would rise by 130,000 following a previously reported 97,000 February increase, according to the median of 75 forecasts in a Bloomberg News survey. They also anticipated an increase in the unemployment rate to 4.6 percent.
Revisions for the previous two months showed employers added 32,000 more jobs than the Labor Department had earlier estimated.
Earnings
Workers' average hourly earnings rose 6 cents, or 0.3 percent, after a 0.4 percent increase the previous month. Economists expected a 0.3 percent increase in hourly wages. Earnings were up 4 percent from March last year.
``There's not a lot of deterioration in the labor market, despite the worries over the effects of the housing market,'' Michelle Girard, senior economist at RBS Greenwich Capital in Greenwich, Connecticut, said before the report. ``The fact that the labor market is still tight means the hurdle for Fed easing rates is higher than a lot of people might think.''
Builders added 56,000 jobs after shedding 61,000 the prior month. The snap back is probably due to the return of more seasonable temperatures after cold weather played a role in the February drop, the Labor Department said.
Service industries, which include banking, insurance, restaurants and retailers, gained 137,000 workers last month after a 180,000 gain in February, the report showed. The increase was led by a 36,000 gain in retail employment that was the biggest since July 2005.
Manufacturing
Manufacturers' payrolls fell 16,000 last month after dropping 11,000 a month earlier. Economists expected manufacturers to eliminate 12,000 positions. The manufacturing workweek rose to 41.1 hours and overtime increased to 4.3 hours from 4.2 hours.
Average weekly hours worked by production workers increased to 33.9 from 33.8. Economists in the Bloomberg survey had forecast hours would rise to 33.8 from 33.7.
Average weekly earnings rose to $583.76 last month from $580.01 in February.
``We continue to see modest growth and stability in the labor market,'' Steve Pogorzelski president of Monster International Worldwide, said in an interview on April 4. ``Employers continue to report they're concerned about turnover, driven by opportunities to make more money'' in other jobs.
The report is in line with others in recent weeks that suggested the labor market was holding up.
Other Surveys
ADP Employer Services said companies added 106,000 jobs last month after a 65,000 gain in February. The ADP data are based only on a count of private payrolls that exclude government workers.
A Conference Board survey released last week showed the share of Americans who said jobs are plentiful rose last month to the highest since August 2001. First-time claims for unemployment benefits also showed companies are holding on to workers.
``It's hard to find enough people to grow the way we want,'' said John Milligan, chief operating officer of Foster City, California-based Gilead Sciences Inc., the world's second-biggest seller of HIV drugs behind GlaxoSmithKline Plc, in an interview last month.
Other businesses are trying to trim costs by reducing staff. Milpitas, California-based Solectron Corp., the world's second- largest maker of electronics for other companies, said last week it may cut as many as 1,500 jobs as it consolidates facilities in North America and Europe.
Fed
Federal Reserve policy makers were counting on jobs and wages to keep consumers and the economy afloat.
``The continuing increases in employment, together with some pickup in real wages, have helped sustain consumer spending,'' Fed Chairman Ben S. Bernanke said during Congressional testimony last week. ``Growth in consumer spending should continue to support the economic expansion in coming quarters.''
Bernanke also said interest-rate policy was still aimed at combating inflation, which central bankers considered a bigger risk to the economy. Still, ``uncertainties have risen, and therefore a little more flexibility might be desirable.''
