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Employers Boosted Hiring, Wages in March: U.S. Economy Preview
By Vince Golle
April 1 (Bloomberg) -- Employers picked up the pace of hiring in the
U.S. last month, boosting wages and helping to keep the five-year
economic expansion intact as housing slumps.
The economy created 130,000 jobs in March, improving on a 97,000 gain
the previous month, according to the median forecast of economists
surveyed by Bloomberg News. The Labor Department's April 6 release is
also forecast to show the unemployment rate edged up to 4.6 percent
from 4.5 percent.
Employment gains are generating the income necessary to keep consumer
spending, which accounts for more than two-thirds of the economy, from
faltering. Spending increases are pivotal to the Federal Reserve's
forecast of ``moderate'' growth as corporate investment shows signs of
flagging.
``Consumer spending has been a main driver of this expansion, and we
expect that to continue throughout 2007,'' said Dean Maki, chief U.S.
economist at Barclays Capital in New York. ``The tight labor market is
leading to strong gains in household wage and salary income.''
March's hiring rebound, in part, is a function of better weather,
economists said. Construction payrolls probably won't match February's
62,000 drop caused by snowstorms mid month.
``Better weather in March should allow many of those workers to return
to the payroll, but a still faltering housing market is likely to
limit the rebound in construction jobs,'' said David Resler, chief
economist at Nomura Securities International Inc. in New York.
Economists said the payroll gains also stem from increased employment
at service industries, including health care and education. Factories
are forecast to shed 10,000 jobs after a loss of 14,000 a month
earlier. That would mark the ninth straight month manufacturers have
reduced headcount.
Hourly Earnings
The government's report is also forecast to show that average hourly
earnings rose 0.3 percent in March after a 0.4 percent gain a month
earlier. The increase would leave earnings up 4 percent from the same
time last year, exceeding inflation.
The earnings figures are for production and non-supervisory workers
that account for about 80 percent of all employment. With this week's
release, the Labor Department is introducing more comprehensive data
on earnings to include all workers as well as irregular payments such
as bonuses.
The government said it plans to phase out the current figures once the
new series is well-established.
Wage gains that aren't offset by higher productivity pose a risk of
fueling inflation, Fed Chairman Ben S. Bernanke said last week during
Congressional testimony.
Qualified Workers
``Measures of labor compensation, though still growing at a moderate
pace, have shown some signs of acceleration over the past year, likely
in part the result of tight labor markets,'' Bernanke said. Anecdotal
evidence suggests companies are having trouble finding qualified help
``in a range of occupations.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEHlH0RwVoAw&refer=home
By Vince Golle
April 1 (Bloomberg) -- Employers picked up the pace of hiring in the
U.S. last month, boosting wages and helping to keep the five-year
economic expansion intact as housing slumps.
The economy created 130,000 jobs in March, improving on a 97,000 gain
the previous month, according to the median forecast of economists
surveyed by Bloomberg News. The Labor Department's April 6 release is
also forecast to show the unemployment rate edged up to 4.6 percent
from 4.5 percent.
Employment gains are generating the income necessary to keep consumer
spending, which accounts for more than two-thirds of the economy, from
faltering. Spending increases are pivotal to the Federal Reserve's
forecast of ``moderate'' growth as corporate investment shows signs of
flagging.
``Consumer spending has been a main driver of this expansion, and we
expect that to continue throughout 2007,'' said Dean Maki, chief U.S.
economist at Barclays Capital in New York. ``The tight labor market is
leading to strong gains in household wage and salary income.''
March's hiring rebound, in part, is a function of better weather,
economists said. Construction payrolls probably won't match February's
62,000 drop caused by snowstorms mid month.
``Better weather in March should allow many of those workers to return
to the payroll, but a still faltering housing market is likely to
limit the rebound in construction jobs,'' said David Resler, chief
economist at Nomura Securities International Inc. in New York.
Economists said the payroll gains also stem from increased employment
at service industries, including health care and education. Factories
are forecast to shed 10,000 jobs after a loss of 14,000 a month
earlier. That would mark the ninth straight month manufacturers have
reduced headcount.
Hourly Earnings
The government's report is also forecast to show that average hourly
earnings rose 0.3 percent in March after a 0.4 percent gain a month
earlier. The increase would leave earnings up 4 percent from the same
time last year, exceeding inflation.
The earnings figures are for production and non-supervisory workers
that account for about 80 percent of all employment. With this week's
release, the Labor Department is introducing more comprehensive data
on earnings to include all workers as well as irregular payments such
as bonuses.
The government said it plans to phase out the current figures once the
new series is well-established.
Wage gains that aren't offset by higher productivity pose a risk of
fueling inflation, Fed Chairman Ben S. Bernanke said last week during
Congressional testimony.
Qualified Workers
``Measures of labor compensation, though still growing at a moderate
pace, have shown some signs of acceleration over the past year, likely
in part the result of tight labor markets,'' Bernanke said. Anecdotal
evidence suggests companies are having trouble finding qualified help
``in a range of occupations.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEHlH0RwVoAw&refer=home
