Good news on new jobs.
Employers Stepped Up Hiring in March: U.S. Economy Preview
March 28 (Bloomberg) -- U.S. employers added more jobs in March than in any month since December 2000, and an increase in orders caused manufacturers to boost production, a pair of reports may show next week.
Payrolls are forecast to have grown by 120,000 this month, compared with a gain of 21,000 in February, according to the median estimate in a Bloomberg News survey of economists in advance of Friday's report from the Labor Department.
An index from the Institute for Supply Management, released Thursday, may show an 11th month of expansion at U.S. manufacturers. Regional surveys this month have shown factories are taking longer to fill orders, with companies such as Qualcomm Inc. and Avnet Inc. struggling to meet demand. Increased hiring may follow.
``The economy is improving,'' said Ellen Hughes-Cromwick, senior economist at Ford Motor Co., the second-biggest U.S. automaker, in an interview Thursday. ``We will see some job growth in coming months.''
The weakest payroll gains of any expansion since World War II have threatened to undermine the sustainability of the expansion. Payrolls have grown by 61,000 workers on average over the last six months, compared with an average of 207,000 a month during the comparable period after the 1990-1991 recession. The expected gain for March compares with 124,000 in December 2000.
The unemployment rate may have held at a two-year low of 5.6 percent in March, according to economists.
Factory Index
The lack of jobs has become a central issue in this year's campaign for president.
Senator John F. Kerry, the Massachusetts Democrat who is trying to unseat President George W. Bush, offered a tax plan Friday that he said would encourage companies to hire more workers in the U.S., which would help reverse the 2.2 million jobs lost since Bush took office in 2001.
Gregory Mankiw, chairman of the White House Council of Economic Advisers, said Thursday that the job market will strengthen this year because of Bush's $1.7 trillion in tax cuts over 10 years and other policies. The labor market ``is turning the corner,'' he said.
An index of supplier deliveries, which gauges the time it takes factories to receive parts, jumped to a three-decade high this month, a regional report from the Federal Reserve Bank of Philadelphia showed. The delivery index in a similar report from the New York Fed rose to the highest in the almost three-year history of that survey.
The Institute for Supply Management's national factory index for March may come in at 59.5, compared with 61.4 in February, according to the median forecast of economists before Thursday's report. January's reading of 63.6 was the highest since December 1983, and the index has averaged 51.8 in the last two decades. A figure greater than 50 signals more manufacturers are expanding than contracting.
Manufacturing Jobs
Friday's report from the Labor Department may show that factories increased employment for the first time since July 2000, adding 5,000 workers, according to the median estimate of economists surveyed.
A separate regional index from the National Association of Purchasing Management-Chicago on Wednesday will probably show a reading of 61, compared with 63.6 in February.
Factories orders probably rose 1.5 percent in February, the fourth increase in the last six months, Wednesday's report from the Commerce Department is forecast to show. An increase in bookings for computers, motor vehicles and aircraft paced a 2.5 percent jump in orders for durable goods in February, Commerce reported last week.
Consumer Confidence Falls
Qualcomm, the world's No. 2 maker of mobile-telephone microchips, may not be able to fill orders completely until May or June, Chief Executive Officer Irwin Jacobs said in an interview Tuesday.
``Demand has been very strong, and so we are scrambling to get the chips,'' said Jacobs, whose company is based in San Diego. ``In just about every region we have been seeing some significant improvement over what we had anticipated.''
Avnet, which distributes semiconductors used in products such as automobiles, wireless phones and computers, said last week the time it takes to fill orders has lengthened ``significantly'' to between 10 weeks and 14 weeks, according to Chief Executive Roy Vallee. The Phoenix company will be employing more workers by this time next year, he said in an interview last week. He qualified that by saying the increase won't be ``substantial.''
The lack of hiring, higher gasoline costs and falling stock prices may have caused consumer confidence to fall to a five- month low in March, a report Tuesday from the Conference Board may show, according to the median estimate. The New York-based research group's index may have slipped to 86, the lowest since October, from 87.3 last month.
Firings have slowed. Initial claims for jobless benefits probably totaled 340,000 in the week that ended Saturday, up just 2,000 from a three-year low reached earlier this month, economists expect Thursday's report from the Labor Department will show.
Spending on construction projects probably held steady last month as inclement weather depressed residential building, according to Joseph Abate, a senior economist at Lehman Brothers Inc. in New York, whose forecast matched the survey median. High vacancy rates will also serve to damp construction of commercial structures, he said.
Bloomberg Survey
Date Time Period Indicator BN Survey Prior
03/30 10:00 March Confidence-Conf. Board 86.1 87.3
03/31 10:00 March Chicago Purchasers 61.0 63.6
03/31 10:00 Feb. Factory Orders 1.5% -0.5%
04/01 8:30 3/20 Continuing Claims 2988K 3004K
04/01 8:30 3/27 Initial Jobless Claims 340K 339K
04/01 10:00 Feb. Construction Spending 0.0% -0.3%
04/01 10:00 March NAPM 59.5 61.4
04/01 10:00 March NAPM-Prices 81.0 81.5
04/02 8:30 March Avg. Hourly Earnings 0.2% 0.2%
04/02 8:30 March Change Nonfarm Jobs 120K 21K
04/02 8:30 March Unemployment Rate 5.6% 5.6%
To contact the reporter on this story:
Carlos Torres in Washington ctorres2@bloomberg.net. |
