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Job Gains Slow Amid U.S. Unemployment at Four-Year Low

*from www.bloomberg.com, April 5, 2013 (To view original article click here.)

Take Away #1: U.S. employers hired fewer workers than forecast in March and a shrinking labor force pushed the unemployment rate down to the lowest in four years.

Key Facts and Figures:

  • Payrolls grew by 88,000, the smallest gain in nine months.
  • This is less than the most pessimistic forecast in a Bloomberg survey, after a revised 268,000 February increase, Labor Dept. data showed today.
  • The jobless rate fell 7.6% from 7.7%.
  • The share of working-age population in the labor force, or the labor force participation rate, fell to 6.3%, the lowest since May 1979.
  • The average number of hours worked for all employees increased in March, while earnings stagnated.

Take Away #2: “This is really a story about the fiscal austerity hitting an otherwise improving economy and delaying what should be improvement in growth.”

Key Facts and Figures:

  • Most American companies are still lean and mean,” said Ethan Harris of Bank of America Corp.
  • “They’ve been very disciplined about controlling their workforce, their spending and investment,” said Harris.

Take Away #3: Stocks and bonds tumbled as the report raised concern that the federal budget cuts may be sapping growth in the U.S. economy.

Key Facts and Figures:

  • The absence of sustained and bigger gains in employment and earnings underscores the Fed’s current view.
  • The Fed has stated that more progress is needed before record monetary policy stimulus can be scaled back.
  • The S&P 500 Index declined 0.9% to 1,545.25 at 12:17 p.m. in New York.
  • The yield on the benchmark 10-year Treasury note fell to 1.69% from 1.79% late yesterday.

Take Away #4: The difference between today’s outcome for March and the average estimate of economists surveyed by Bloomberg was 3.5 times larger than the poll’s standard deviation.

Key Facts and Figures:

  • The last time the report diverged as much was with the May 2012 report.
  • The median of 87 estimates in a Bloomberg survey called for a 190,000 advance in payrolls.
  • Projections ranged form gains of 100,000 to 366,000 following an initially reported 236,000 increase in February.
  • Revisions added a total of 61,000 jobs to the employment count in January and February.
  • The dollar dropped 0.5% against the euro five minutes after the report was released.

Take Away #5: Some companies are struggling to make do with fewer workers.

Key Facts and Figures:

  • At Wal-Mart Stores Inc., the company doesn’t have enough employees to keep shelves stocked, according to interviews with workers.
  • In the past five years, the world’s largest retailer added 455 U.S. Wal-Mart stores, a 13% increase.
  • In the same period, its total U.S. workforce, including Sam’s Club employees, dropped by about 20,000, or 1.4%.
  • Wal-Mart employs about 1.4 million U.S. workers.
  • Retail payrolls slumped by the most since February 2012 and factory employment declined for the first time since September.

Take Away #6: The unemployment rate was forecast to hold at 7.7%, according to the Bloomberg survey median.

Key Facts and Figures:

  • The figure, the lowest since December 2008, reflected a 496,000 decline in size of the labor force.
  • The job market slowed progress just as $95 billion in automatic across-the-board government budget cuts, known as sequestration, started on March 1.
  • The reductions in planned spending trim 5% from the domestic agencies and 8% for the Defense Dept. this fiscal year.
  • ProNet Career Resources is an unemployment and underemployment group founded in 2003.
  • Many of its members are baby boomers struggling to find job opportunities as they compete with recent college graduates.

Take Away #7: Sequestration could have an adverse affect on the economy.

Key Facts and Figures:

  • Alan Krueger, chairman of the White House Council of Economic Advisors said of Sequestration, “That’s one of the headwinds we’re facing.”
  • A Congressional Budget Office estimate shows that the enforced budget cuts will reduce employment by 750,000 by the end of the year.
  • Krueger repeated President Obama’s call to replace the across-the-board cuts with a deficit reduction package that includes raising more revenue from taxes in addition to trimming spending.

Take Away #8: Still, consumer and corporate demand has given companies reason to keep expanding.

Key Facts and Figures:

  • American’s have coped with a 2 percentage-point increase in payroll taxes and a jump in gasoline prices earlier this year.
  • In February, household purchases climbed the most in five months.

Take Away #9: Some businesses have added more workers, employers boosted hours to meet demand, and private payrolls climbed in March.

Key Facts and Figures:

  • Winnebago Industries Inc. have had to add more workers as output increased.
  • The company boosted daily production 24% during its fiscal second quarter compared with the prior three months, partly by adding staff, said CFO Sarah Nielsen.
  • The company has been adding about 20 people a week on a consistent basis, she said.
  • Employers boosted hours to meet demand, today’s report showed.
  • The average work week for all employees increased by six minutes to 34.6 hours, the highest since February 2012.
  • Private payrolls, which exclude jobs at government agencies, climbed 95,000 in March after a revised gain of 254,000 the previous month.
  • Government payrolls decreased by 7,000 last month after a 14,000 increase.

Take Away #10: A healthier real-estate market is creating more construction jobs, while factory employment dropped.

Key Facts and Figures:

  • Factory employment dropped by 3,000 workers in March, following a 19,000 increase in the previous month.
  • Employment at private service-providers rose 79,000 last month.
  • A healthier real-estate market has created the need for more construction jobs since the middle of 2012.
  • Construction companies added 18,000 workers last month after a 49,000 surge in February that was the biggest in almost six years.
  • The Pollack Shores Real Estate Group, apartment developer and property manager, has boosted employment to 120 this week from 93 at the end of 2012.
  • The company plans to build about 2,000 apartments this year, twice as many as last year, said President Steven Shores.

Take Away # 11: Fed officials are waiting for sustained signs of job-market resilience before winding down their $85 billion of monthly bond purchases.

Key Facts and Figures:

  • Central bank policy makers reiterated in a March 20 statement that they would continue to buy securities until the labor market outlook improves “substantially”.
  • Each month the Fed is purchasing Treasuries and mortgage bonds to keep interests rates low, spur economic growth, and reduce unemployment.

*To view original article from www.bloomberg.com click here.

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