Bloomberg report, Jobs growth ? temporary
Posted: Fri Jun 04, 2010 11:38 am
Payrolls in U.S. Increase in May Less Than Forecast (Update3)
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By Shobhana Chandra
June 4 (Bloomberg) -- Employers in the U.S. hired fewer workers in May than forecast and Americans dropped out of the labor force, showing a lack of confidence in the recovery that may lead to slower economic growth.
Payrolls rose by 431,000 last month, including a 411,000 jump in government hiring of temporary workers for the 2010 census, Labor Department figures in Washington showed today. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey. Private payrolls rose a less-than-forecast 41,000. The jobless rate fell to 9.7 percent.
Stocks declined and Treasuries surged on expectations a slowing in the labor market will restrain consumer spending, the biggest part of the economy. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.
“Hiring looks soft,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It does raise some red flags that businesses are still pretty cautious.”
The Standard & Poor’s 500 Index dropped 1.4 percent to 1,087.18 at 10:24 a.m. in New York. The 10-year Treasury note rose, pushing the yield down to 3.26 percent from 3.37 percent late yesterday.
Payrolls Forecasts
Payrolls estimates in the Bloomberg survey of 82 economists ranged from 220,000 to 750,000 after a gain of 290,000 jobs in April. Economists surveyed also forecast the jobless rate fell to 9.8 percent last month from 9.9 percent in April. Unemployment reached a 26-year high of 10.1 percent in October. The May figures showed the labor force shrank 322,000.
Federal hiring of temporary workers to conduct the decennial population count probably peaked last month, economists said.
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.
The gain in private payrolls followed an increase of 218,000 in April that was revised from 231,000. Excluding all government jobs, employment climbed by 116,000 a month on average in the five years to December 2007, when the recession began.
Factory Employment
Manufacturing payrolls increased by 29,000 in May, a fifth straight gain and less than the survey median of a 33,000 increase.
“Job growth is going to be anemic,”
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Shobhana Chandra
June 4 (Bloomberg) -- Employers in the U.S. hired fewer workers in May than forecast and Americans dropped out of the labor force, showing a lack of confidence in the recovery that may lead to slower economic growth.
Payrolls rose by 431,000 last month, including a 411,000 jump in government hiring of temporary workers for the 2010 census, Labor Department figures in Washington showed today. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey. Private payrolls rose a less-than-forecast 41,000. The jobless rate fell to 9.7 percent.
Stocks declined and Treasuries surged on expectations a slowing in the labor market will restrain consumer spending, the biggest part of the economy. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.
“Hiring looks soft,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It does raise some red flags that businesses are still pretty cautious.”
The Standard & Poor’s 500 Index dropped 1.4 percent to 1,087.18 at 10:24 a.m. in New York. The 10-year Treasury note rose, pushing the yield down to 3.26 percent from 3.37 percent late yesterday.
Payrolls Forecasts
Payrolls estimates in the Bloomberg survey of 82 economists ranged from 220,000 to 750,000 after a gain of 290,000 jobs in April. Economists surveyed also forecast the jobless rate fell to 9.8 percent last month from 9.9 percent in April. Unemployment reached a 26-year high of 10.1 percent in October. The May figures showed the labor force shrank 322,000.
Federal hiring of temporary workers to conduct the decennial population count probably peaked last month, economists said.
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.
The gain in private payrolls followed an increase of 218,000 in April that was revised from 231,000. Excluding all government jobs, employment climbed by 116,000 a month on average in the five years to December 2007, when the recession began.
Factory Employment
Manufacturing payrolls increased by 29,000 in May, a fifth straight gain and less than the survey median of a 33,000 increase.
“Job growth is going to be anemic,”
