• Friday, April 02nd, 2010

April 2, 2010

Employment in the U.S. probably grew in March by the most in three years as the economy expanded, the weather improved and the government hired temporary workers to conduct the census, economists said before a report today.

Caterpillar Inc. is among companies adding staff, showing the recovery that began last year is on the verge of creating the jobs needed to lift consumer spending and sustain the expansion. At the same time, unemployment may take time to recede as formerly discouraged employees flood the labor force looking for work, signaling the Federal Reserve will keep interest rates low in coming months.

“As demand improves, just about every business is looking to add workers where they have to,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “The job gains are going to be very supportive of consumer spending.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Economists’ payroll forecasts range from a decline of 40,000 to a 360,000 gain. Estimates for the unemployment rate spanned from 9.5 percent to 9.9 percent.

Part of the expected payroll surge last month represents a rebound from the February blizzards that set seasonal snowfall records in cities including Washington and Philadelphia, shuttering some businesses during the week of the government survey. Any hiring that would have taken place that week will now be reflected in the March job count instead.

Census Hiring

A government boost to hiring already under way at the Census Bureau may add to the potential weather-related gain in employment. The agency said it will take on 1.15 million temporary workers in the first half of the year to conduct the population count that occurs every 10 years.

The program may have the biggest impact on payroll figures in April through June, when the bulk of the census 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.

One company adding to payrolls is Leggett & Platt Inc., the 127-year-old manufacturer. The Carthage, Missouri-based company has hired a few hundred employees this year to meet rising demand for its car-seat parts and home-furniture components, according to Chief Executive Officer David Haffner.

‘Things Are Better’

“Things are better,” Haffner, 57, said in a March 16 interview. “We are reluctant to get too optimistic too quickly, but things are relatively better.”

Caterpillar, the world’s largest maker of construction equipment, in March said it plans to hire 500 workers this year to expand a generator plant in Newberry, South Carolina.

Optimism about company earnings and the economy are propelling U.S. stocks. The Standard & Poor’s 500 Index has gained 5.6 percent so far in 2010 after a 23 percent surge last year. The gauge yesterday reached its highest level in 18 months after a private report showed manufacturing expanded in March at the fastest pace since July 2004.

Last Year

Of the 8.4 million jobs lost since the beginning of the recession in December 2007, about 4 million have come since Obama took office in January 2009, when the unemployment rate was 7.7 percent.

Obama last month signed an $18 billion jobs bill into law that provides a tax break to companies hiring unemployed workers. The measure also expands federal subsidies for municipal bonds, increases highway spending and grants small- business tax write-offs on investment costs.

Joblessness is also one measure of the economic “slack” that Fed policy makers have said will restrain inflation. Central bankers last month reiterated a pledge to maintain the benchmark interest rate near zero for “an extended period.”

Last week Fed Chairman Ben S. Bernanke told Congress that the “unemployment situation is very weak,” with 40 percent of those without jobs being out of work for a long time.

So far, business have decided to update equipment before taking on more staff in a bid to look for technology-enabled ways to do more with less. Investment in new equipment advanced at a 19 percent annual rate in the final three months of 2009, the biggest gain since 1998, at the same time employers reduced payrolls by 269,000.

More jobs and a lower unemployment rate may be needed to sustain gains in consumer spending, which rose in February for a fifth consecutive month.

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One Response

  1. 1
    Mike Harmon 

    Great news. I always enjoy reading your blog!

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