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unemployment upto 9.9%, oh yea economy is rocking!
May 7 (Bloomberg) -- Employment in the U.S. increased in April by the most in four years and the unemployment rate unexpectedly rose as thousands of people entered the labor force, indicating the recovery is becoming self-sustaining.
Payrolls jumped 290,000 last month, more than the median estimate of economists surveyed by Bloomberg News, after a revised 230,000 increase in March that was larger than initially estimated, figures from the Labor Department in Washington showed today. The jobless rate rose to 9.9 percent last month from 9.7 percent.
Companies such as General Electric Co. are boosting staff as sales improve, leading to income gains that may spur consumer spending and more hiring. At the same time, unemployment may take time to recede as Americans who had dropped out of the workforce resume the job hunt, one reason why the Federal Reserve says it will keep interest rates low.
“Employers are hiring again because they’re seeing higher sales and better profit,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who had forecast a 300,000 gain in payrolls. “The unemployment rate is up as discouraged workers are returning to the job market to look for employment.”
Stock-index futures maintained gains and Treasury securities fell after the report. Futures on the Standard & Poor’s 500 Index expiring in June increased 0.6 percent to 1,128.8 at 8:52 a.m. in New York. The 10-year Treasury note declined, pushing up the yield to 3.47 percent from 3.4 percent late yesterday.
Manufacturers and Services
Manufacturers added the most workers to payrolls since August 1998, employment at service-providers rose the most since November 2006 and construction companies hired for a second straight month. The gain in overall employment in April was the biggest since March 2006.
Overall payrolls were forecast to increase by 190,000, according to the median estimate of 84 economists surveyed by Bloomberg. Estimates ranged from gains of 75,000 to 300,000.
The April gain included 66,000 temporary workers hired by the government to help conduct the 2010 census and a 231,000 rise in private payrolls.
The improving economic data is one reason The Greek debt crisis is unlikely to derail the U.S. economic recovery, according to economists like James O’Sullivan.
“Growth data has been heading upward into the crisis in the U.S. and globally,” O’Sullivan, chief economist at MF Global Ltd. in New York, said before the report. “That is a very powerful force to counter the headwinds from the problems in Europe.”
Stocks Yesterday
The Dow Jones Industrial Average plunged as much as 998.5 points, or 9.2 percent, before paring its drop to 347.8 points at the close of trading in New York yesterday. It ended the day at 10,520.32, a two-month low. The S&P 500 fell 3.2 percent to 1,128.15.
The jobless rate was projected to hold at 9.7 percent. Forecasts ranged from 9.5 percent to 9.8 percent. The unemployment rate rose as more people entered the workforce. The figures showed an 805,000 increase in the civilian labor force and employment rose by 550,000.
The gain in private payrolls was the fourth in a row and followed a 174,000 increase in March that may have reflected, in part, a weather-related rebound from the prior month. Private employment was projected to climb by 100,000, according to the median of 25 forecasts.
A government boost to hiring is already under way at the Census Bureau. The agency said it will take on about 970,000 temporary workers from April through June to conduct the population count that occurs every 10 years.
April and May
The government program may have the biggest impact on payroll figures in April and May, when the bulk of the hiring will take place, and will then subtract from the job count the following months as employees are dismissed after the work is done.
For that reason, economists will be excluding workers on public payrolls for much of the rest of the year in gauging the state of the labor market.
Average hourly earnings rose to $22.47 in April from $22.46 in March, today’s report showed.
Today’s report from the Labor Department showed that government payrolls increased by 59,000 in April. State and local governments reduced employment by 6,000 during the month, while the federal government added 65,000.
The average work week for all workers rose to 34.1 hours in April, the highest since January 2009, from 34 hours the prior month.
Underemployment Rate
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 17.1 percent from 16.9 percent.
The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more rose as a percentage of all jobless, to a record 45.9 percent.
Factory payrolls surged 44,000 in April after rising 19,000 in the prior month. The median forecast by economists in the Bloomberg survey called for a gain of 20,000.
Payrolls at builders increased 14,000 last month after gaining 26,000.
Service providers added 225,000 workers after an increase of 175,000 in March.
The number of temporary workers increased 26,200 in April. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff.
Hiring at GE
Some companies are seeing enough improvement in sales to warrant increasing headcount. GE, the world’s largest maker of jet engines, power-generation equipment and locomotives, increased the number of jobs it plans to add in Michigan to more than 1,300 with the creation of about 220 aerospace manufacturing positions, the Fairfield, Connecticut-based company said this week.
Billionaire Warren Buffett, whose Berkshire Hathaway Inc. cut more than 20,000 jobs last year, said his Omaha, Nebraska- based company is now adding staff as the economic recovery boosts demand at its industrial units.
“We do hire people when we have something for them to do,” Buffett told investors last week in Omaha, Nebraska, where Berkshire held its annual shareholders’ meeting. “We are a net hirer now.”
The economy grew at a 3.2 percent annual rate in the first three months of the year, the third quarterly advance, according to data from the Commerce Department released last week.
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Originally Posted by Deuce
