Employers in the US kept cutting jobs last month and manufacturing picked up, pointing to an uneven economic recovery that will take time to encourage hiring, economists said before reports this week.
Payrolls fell by 175,000 workers last month, deepening the worst employment slump since the 1930s, according to the median of 63 estimates in a Bloomberg News survey ahead of a Friday Labor Department report. A purchasing managers’ report may show factories expanded at the fastest pace since 2006.
Rising joblessness and waning government assistance raise the risk that consumer spending will slip again, holding back the expansion. Federal Reserve policy makers, meeting this week, will probably debate whether the lack of jobs merits maintaining interest rates low for a long time, or if excess stimulus risks kindling inflation.
“No one’s going to hire anybody until they have to, so it’s a very tough environment for households,” said Joshua Shapiro, chief US economist at Maria Fiorini Ramirez Inc, a New York forecasting firm. “Manufacturing is clearly the strongest part of the economy right now because it’s benefiting from the need to restock.”
The jobless rate last month probably climbed to 9.9 percent, the highest level since 1983, from 9.8 percent in September, according to the survey median. Unemployment will exceed 10 percent early next year, according to the median forecast in a Bloomberg poll last month.
The projected drop in employment would be the smallest since August last year, indicating the labor market is deteriorating at a slower pace. Job losses peaked at 741,000 in January, the biggest one-month plunge since 1949.
Fed policy makers meet tomorrow and Wednesday in Washington and may repeat their pledge to keep interest rates low for an “extended period.”
The US economy grew at a 3.5 percent annual pace from July through September, the first quarterly expansion in more than a year, Commerce Department figures released last week showed. A separate government report showed consumer spending fell in September for the first time in five months.
Manufacturing probably accelerated last month, economists said.
The Institute for Supply Management may report today that its manufacturing index climbed to 53 last month, the highest level since August 2006, the survey median showed. Readings greater than 50 signal expansion.
A report from the Commerce Department tomorrow is expected to show that orders placed with US factories rose 0.8 percent in September from the previous month, according to the survey median. A gain would be the fifth in the past six months.
The jobs report on Friday may also show factory employment dropped by 46,000 workers last month compared with a 51,000 decrease in September. The US has lost a total of 7.2 million jobs since December 2007.
Some manufacturers are starting to rehire previously dismissed employees. Cummins Inc, the largest maker of heavy duty diesel truck engines in North America, cut about 7,500 workers from late last year through June and has since recalled about 900.
“Despite the improvements we have seen in some of our markets, we still face considerable challenges over the next year,” chief operating officer Tom Linebarger said on Friday on a conference call. “In particular, we expect the first half of 2010 to be extremely difficult, especially in North America.”
Inventories at wholesalers in September probably dropped at a slower pace, a Commerce Department report on Friday is expected to show. The 1 percent decrease, the smallest since January, suggests companies anticipate a pickup in sales and don’t want to deplete stockpiles much more.
The Standard & Poor’s 500 Index fell last week, marking the first monthly drop since February, after reports prompted concern that consumers will restrain the economic recovery.
In other reports this week, the number of contracts to buy previously owned homes were little changed in September, the first time in eight months they didn’t increase, according to the survey median. The National Association of Realtors’ report on pending home sales is due tomorrow.
Home sales have climbed in recent months, propelled in part by an US$8,000 tax credit for first-time buyers that is set to expire at the end of this month.
Senate Democrats want to extend the credit through April and expand it to allow higher-income Americans and some who already own homes to qualify for the incentive. The White House endorses the extension and lawmakers are expected to vote on the measure this week, according to Senate Majority Leader Harry Reid.
ANNOUNCEMENT: People who do not comply with the ban after a spoken warning would be reported to the police, the airport company said on Friday Taoyuan International Airport Corp on Friday announced that riding on vehicles, including scooter-suitcases (also known as “scootcases”), bicycles, scooters and skateboards, is prohibited in the airport’s terminals. Those using such vehicles should manually pull them or place them on luggage trolleys, the company said in a Facebook post. The ban intends to maintain order and protect travelers’ safety, as the airport often sees large crowds of people, it said, adding that it has stepped up publicity for the regulation, and those who do not comply after a spoken warning would be reported to the police. The company yesterday said that
NEW YEAR’S ADDRESS: ‘No matter what threats and challenges Taiwan faces, democracy is the only path,’ William Lai said, urging progress ‘without looking back’ President William Lai (賴清德) yesterday urged parties across the political divide to democratically resolve conflicts that have plagued domestic politics within Taiwan’s constitutional system. In his first New Year’s Day address since becoming president on May 20 last year, Lai touched on several issues, including economic and security challenges, but a key emphasis was on the partisan wrangling that has characterized his first seven months in office. Taiwan has transformed from authoritarianism into today’s democracy and that democracy is the future, Lai said. “No matter what threats and challenges Taiwan faces, democracy is the only path for Taiwan,” he said. “The only choice
CORRUPTION: Twelve other people were convicted on charges related to giving illegal benefits, forgery and money laundering, with sentences ranging from one to five years The Yilan District Court yesterday found Yilan County Commissioner Lin Zi-miao (林姿妙) guilty of corruption, sentencing her to 12 years and six months in prison. The Yilan District Prosecutors’ Office in 2022 indicted 10 government officials and five private individuals, including Lin, her daughter and a landowner. Lin was accused of giving illegal favors estimated to be worth NT$2.4 million (US$73,213) in exchange for using a property to conduct activities linked to the 2020 Chinese Nationalist Party (KMT) presidential and legislative election campaigns. Those favors included exempting some property and construction firms from land taxes and building code contraventions that would have required
TECH CORRIDOR: Technology centers and science parks in the south would be linked, bolstering the AI, semiconductor, biotech, drone, space and smart agriculture industries The Executive Yuan yesterday approved a “Southern Silicon Valley” project to promote the development of an artificial intelligence (AI) and semiconductor industry in Chiayi County, Tainan, Pingtung County and Kaohsiung. The plan would build an integrated “S-shaped semiconductor industry corridor” that links technology centers and science parks in the south, Executive Yuan spokesperson Michelle Lee (李慧芝) said yesterday after a Cabinet meeting. The project would bolster the AI, semiconductor, biotech, drone, space and smart agriculture industries, she said. The proposed tech corridor would be supported by government efforts to furnish computing power, workforce, supply chains and policy measures that encourage application and integration
RSS