US outlook brightens as job numbers rise
Updated: 2011-10-10 07:55
By Bob Willis (China Daily)
WASHINGTON - United States' employers added more workers in September than forecast and earnings and hours also rose, allaying concern the economy is slipping into another recession.
Payrolls increased by 103,000 after a 57,000 gain in August, the Labor Department said on Friday in Washington. The median forecast in a Bloomberg News survey of economists called for an increase of 60,000. The figures reflected the end of a strike at Verizon Communications Inc that brought 45,000 people back to work. The jobless rate held at 9.1 percent.
Treasuries fell as the report added to evidence the world's largest economy is maintaining its expansion. The pace of job growth is still too slow to push down the unemployment rate as companies hold back on hiring amid a debt crisis in Europe, political gridlock in the United States and a plunge in stock prices.
"These numbers are another argument against the idea that the economy is moving toward a recession," said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.
The yield on the 10-year Treasury note rose to 2.06 percent in New York late on Friday from 1.99 percent a day earlier. The Standard & Poor's 500 Index fell 0.8 percent to 1,155.46.
Revisions added a total of 99,000 jobs to payrolls in July and August, Friday's employment report showed. The figures capped a week of data indicating the economy is gaining strength after growing at the slowest pace in two years in the first half of 2011.
Manufacturing unexpectedly accelerated in September, propelled by gains in exports and production, figures from the Institute for Supply Management showed. Construction spending expanded in August, and orders for capital equipment increased by the most in three months, government data showed.
"The economy is certainly not as weak as it was thought to be over the last couple of months," said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi UFJ Ltd in New York.
Labor Secretary Hilda Solis used the report to push President Barack Obama's $447 billion jobs plan consisting of tax cuts and infrastructure projects.
"We need to do more," Solis said in a Bloomberg Television interview. She said Obama's plan, proposed last month, will create between 1 million to 1.9 million jobs.
Ford Motor Co is among companies planning to boost payrolls, saying last week it has committed to add about 12,000 hourly jobs in its US manufacturing plants by 2015 as part of an agreement with the United Auto Workers.
Ford said it will be "in-sourcing" jobs from Mexico, China and Japan. The company said this will be 5,750 hourly jobs more than a previously announced 7,000 positions to be added by the end of 2012.
Sustained increases of around 200,000 jobs a month are needed to reduce the jobless rate by about a percentage point over a year, according to Eric Green, chief market economist at TD Securities Inc in New York.
More Americans who would like a full-time job are settling for part-time work instead. They are counted in the underemployment rate, which increased to 16.5 percent, the highest this year, from 16.2 percent. The number of people working part-time for "economic reasons" jumped 444,000 to 9.3 million.
Unemployment has exceeded 8 percent since February 2009, the longest stretch of such elevated joblessness since monthly records began in 1948. Through September, the economy has recovered about 2.09 million of the 8.75 million jobs lost as a result of the 18-month recession that ended in June 2009.