Payrolls Probably Rose at Start of Year: U.S. Economy Preview

Payrolls Probably Rose at Start of Year: U.S. Economy Preview

Jan. 31 (Bloomberg) -- The U.S. may have gained jobs in January for the second time in three months as the world’s largest economy began 2010 on firmer footing, economists said before reports this week.

Payrolls probably rose by 13,000 workers this month, according to the median forecast of 50 economists surveyed by Bloomberg News before the Labor Department’s Feb. 5 report. The unemployment rate may have held at 10 percent for the third consecutive month.

The fastest pace of economic growth in six years last quarter may give rise to more employment gains as companies restock shelves and invest in new equipment. While the U.S. will probably take years to recover the 7.2 million jobs lost since the recession began at the end of 2007, additional hiring would be welcome news to President Barack Obama, who said job creation will be his top priority in 2010.

“It’s still quite feeble job growth,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York, who forecast a 25,000 gain in payrolls. “We do think the trend will be toward greater job creation.”

Oracle Corp. and General Electric Co. are among companies looking to hire.

Payrolls fell by 85,000 last month after a 4,000 gain in November that was the first increase in almost two years.

Economy Expands

The U.S. economy expanded in the fourth quarter at a 5.7 percent annual rate, exceeding the median estimate of economists surveyed by Bloomberg News and the best performance since the third quarter of 2003, figures from Commerce Department last week showed.

The jobless rate held at 10 percent in December, restrained by a drop in the labor force as the number of discouraged workers climbed, figures from the Labor Department on Jan. 8 showed. The unemployment rate is forecast to average 10 percent this year, according to the median estimate of economists surveyed this month.

Obama last week said job creation will be the “number one focus in 2010.” Speaking during his first State of the Union address, he called on Congress to deliver a new jobs bill to his desk.

January marks the one-year anniversary of the country’s biggest single-month employment plunge in six decades, showing the economic expansion that began in last year’s third quarter has slowed the pace of job cuts. The U.S. lost 741,000 jobs last January, according to Labor Department figures.

More Hiring

Oracle, completing the acquisition of Sun Microsystems Inc. last week, will hire 2,000 salespeople, President Charles Phillips said on Jan. 27. He said the hiring of new employees, who will sell Sun’s products directly to Oracle’s biggest customers, will start immediately.

General Electric is hiring workers in energy, health care and rail transportation in part because global economic-stimulus policies have created demand, two executives said last week. GE is bidding to supply new passenger locomotives for Amtrak, and in November announced a joint venture in China that would make high-speed rail locomotives that may add 200 U.S. jobs

“We will create jobs in the United States that could not have been created any other way,” John Rice, chief executive officer of GE Technology Infrastructure, said in an interview with Bloomberg Television from Davos, Switzerland, last week.

Factory Expansion

Manufacturing probably expanded in January for a sixth straight month, economists said before a report from the Institute for Supply Management tomorrow. The Tempe, Arizona- based group’s factory index climbed to 55.5 from 54.9 in December, the survey showed. Readings greater than 50 signal expansion.

Factories are helping lead the economic recovery, and orders for manufactured goods are forecast to increase in December for a fourth straight month, according to the median estimate of economists surveyed. The 0.5 percent gain projected ahead of a Feb. 4 report from the Commerce Department would follow a 1.1 percent rise in November.

Americans probably increased spending in December for a third month as earnings grew, economists said before a report tomorrow from the Commerce Department. Household purchases rose 0.3 percent after climbing 0.5 percent in November, according to the survey median. Incomes gained 0.3 percent following a 0.4 percent increase, the survey showed.

Commercial Slump

Commercial building projects remain a weak spot for the economy. The Commerce Department tomorrow is expected to report construction spending declined in December for an eighth consecutive month, according to economists surveyed. The projected 0.5 percent drop would follow a 0.6 percent decrease the prior month.

The number of contracts to buy previously owned U.S. homes probably rose in December after plummeting 16 percent the previous month, the survey median showed before Feb. 2 figures from the National Association of Realtors. The extension of a government tax credit for homebuyers is likely to boost sales, economists said.

The Standard & Poor’s Supercomposite Homebuilder Index has increased 5.4 percent since the beginning of the year, compared with a 3.7 percent decrease for the S&P 500 Index.



Bloomberg Survey

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Release Period Prior Median
Indicator Date Value Forecast
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Pers Inc MOM% 2/1 Dec. 0.4% 0.3%
Pers Spend MOM% 2/1 Dec. 0.5% 0.3%
PCE Deflator YOY% 2/1 Dec. 1.5% 2.2%
Core PCE Prices MOM% 2/1 Dec. 0.0% 0.1%
Core PCE Prices YOY% 2/1 Dec. 1.4% 1.5%
ISM Manu Index 2/1 Jan. 54.9 55.5
ISM Prices Index 2/1 Jan. 61.5 62.4
Construct Spending MOM% 2/1 Dec. -0.6% -0.5%
Pending Homes MOM% 2/2 Dec. -16.0% 1.0%
ISM NonManu Index 2/3 Jan. 49.8 51.0
Productivity QOQ% 2/4 3Q 8.1% 6.0%
Labor Costs QOQ% 2/4 3Q P -2.5% -2.5%
Initial Claims ,000’s 2/4 23-Jan 470 455
Cont. Claims ,000’s 2/4 16-Jan 4602 4577
Factory Orders MOM% 2/4 Dec. 1.1% 0.5%
Nonfarm Payrolls ,000’s 2/5 Jan. -85 13
Unemploy Rate % 2/5 Jan. 10.0% 10.0%
Manu Payrolls ,000’s 2/5 Jan. -27 -23
Hourly Earnings MOM% 2/5 Jan. 0.2% 0.2%
Hourly Earnings YOY% 2/5 Jan. 2.2% 2.2%
Avg Weekly Hours 2/5 Jan. 33.2 33.2
Cons. Credit $ Blns 2/5 Dec. -17.5 -9.5
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