Payrolls in U.S. Probably Decreased at Slower Pace in November

Employers in the U.S. probably cut fewer jobs in November as the emerging expansion began to stem the worst employment slump in the post-World War II era, economists said before a government report today.

Payrolls fell by 125,000 workers, the smallest drop since March 2008, according to the median estimate of 82 economists surveyed by Bloomberg News. The jobless rate may have held at a 26-year high of 10.2 percent, the survey also showed.

The Obama administration, under pressure after almost half of the 7.3 million jobs lost during the recession have occurred since the president’s inauguration, is weighing additional measures to boost employment. Ben S. Bernanke, chairman of the Federal Reserve, has pledged to maintain record-low interest rates until joblessness subsides.

“We’re not yet at the point where firms will hire people, but we’ll get some positive numbers in the next few months,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “As long as unemployment is high, it’s going to be a while before policy makers and politicians feel comfortable about where the economy is going.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Economists’ payroll forecasts ranged from declines of 30,000 to 185,000.

Companies such as Harley-Davidson Inc. are among those continuing to trim staff to wring out additional cost savings and stem losses.

Economists surveyed by Bloomberg last month projected the jobless rate will exceed to 10 percent through the middle of next year before receding to an average of 9 percent in 2011.

Lehman Collapse
Monthly payroll losses accelerated after the collapse of Lehman Brothers Holdings Inc. in September 2008 and peaked at 741,000 in January. The economy lost 190,000 jobs in October.

Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, is among economists forecasting the jobs hemorrhage that followed Lehman’s collapse may help boost November’s payroll total.

Labor Department models give added weight to what happened in recent years when calculating employment, meaning the 610,000 plunge in unadjusted payrolls last November, the first decline for that month since 2001 and the biggest since records began in 1939, may influence government estimates. Crandall projects a 50,000 drop in payrolls.

President Barack Obama in February signed into law a $787 billion stimulus package aimed at reviving growth and stemming job losses.
Jobs Summit
Obama held a summit at the White House yesterday to get feedback from economists, unions and business leaders on ways to improve the labor market. He is scheduled to follow up with a talk about the economy in Allentown, Pennsylvania, today.
The U.S. economy grew last quarter for the first time in a year, expanding at a 2.8 percent pace, according to a Commerce Department report last month.

Some companies are trimming payrolls until they see sustained gains in sales. Harley-Davidson, the biggest U.S. motorcycle maker, yesterday approved a restructuring plan at its largest plant, in York, Pennsylvania, which will result in the loss of about 950 union jobs.

“A restructured York operation will enable the plant to be competitive and sustainable for the future, and the new labor agreement is critical,” Chief Executive Officer Keith Wandell said in a statement. The Milwaukee-based manufacturer is cutting costs after nine straight quarterly losses.

Factory Jobs
Economists surveyed anticipate factories cut 45,000 jobs last month, according to the median forecast.

Other companies are adding workers. Infosys Technologies Ltd., India’s second-largest software exporter by revenue, plans to add 1,000 employees in the U.S. in the next four to five quarters, Chief Financial Officer V. Balakrishnan said this week.

After reaching a 12-year low on March 9, the Standard & Poor’s 500 Index has gained 63 percent as the economy showed signs of recovering.

Another report today may show orders placed with factories were unchanged in October after increasing five of the previous six months, according to the survey median. The Commerce Department’s figures are due at 10 a.m.


News Source: Bloomberg



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