Payroll Growth Up 19.76%. Monthly Job Growth Predicted To Stabilize This Year At 200,000 Per Month
Per analysis by Maury Harris of UBS Securities LLC and Allen Sinai of Decision Economics Inc. reported by Bloomberg BusinessWeek, payroll growth is growing at a faster pace of about 200,000 a month, after averaging 167,000 in the second half of last year.
According to Mr. Sinai, payrolls may rise 216,000 this month after climbing 236,000 in February, the most since November, he estimates.
Russell Price, a senior economist at Ameriprise Financial Inc. predicts employers will take on 2.5 million workers this year, after hiring 2.2 million last year. Mr. Price has been the top-ranked forecaster of payroll growth for two years according to data compiled by Bloomberg.
Businesses are adding employees to meet stronger demand and supplement workforces that have become increasingly stretched during the four-year expansion. Smaller companies are finding it easier to borrow as banks loosen terms on loans.
“The labor market has shown signs of improvement,” Federal Reserve Chairman Ben S. Bernanke said in a March 20 press conference. He mentioned indicators such as gains in payrolls, more hours worked and a decline in claims for unemployment insurance. The jobless rate, which “remains elevated” at 7.7 percent, has nonetheless “continued to tick down.”
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, has identified three leading indicators of the labor market:
1) changes in jobless claims,
2) temporary help and
3) the ability of small businesses to hire the employees they need.
All three have improved, with applications for jobless benefits averaging 339,750 a week in the four weeks ended March 16, the lowest since February 2008.
Bloomberg BusinessWeek also reports that
— A jump of 16,000 jobs in February brought temporary-help- services payrolls to 2.58 million, the highest since August 2007 and up from 1.75 million in June 2009, when the U.S. emerged from the 18-month recession.”
— The February survey of small-business optimism showed 21% t of respondents had positions they weren’t able to fill, the most since June 2008 and an increase from 18 percent in January, the National Federation of Independent Business reported.
— The Conference Board’s Employment Trends Index (CBETI), which combines Lockhart’s three indicators with five others, rose 1.1% in February from the previous month to 111.14, up from 109.93, the biggest advance in a year. Additionally, the statistic is 3.2% higher than a year ago. The CBETI inncludes:.
1) Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey®)
2) Initial Claims for Unemployment Insurance (U.S. Department of Labor)
3) Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
4) Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
5) Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
6) Job Openings (BLS)
7) Industrial Production (Federal Reserve Board)*
8) Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**
— Much of the progress in the labor market so far has come from a decline in firings, rather than accelerated hiring. The Labor Department reported that 1.51 million workers were let go in January, down from 1.57 million in December and the least in records going back 12 years.
— This pattern is changing, especially as industries that cut jobs during the recession rebound. Construction payrolls have advanced for nine straight months, jumping by 48,000 (USECTOT) in February, the most since March 2007. Manufacturing employment grew by 14,000 to reach the highest level since April 2009.
— Pent-up demand for vehicles will help sustain the need for more workers, with sales of cars and trucks on pace for the best year since 2007.
— Housing, too, is strengthening as rising sales spur home- building, and in turn, boost employment in the industry, as well as in related businesses.