Employers probably added more than 200,000 workers for a third straight month in February amid optimism about the U.S. expansion, economists said before a report this week.
Payrolls increased by 210,000 last month after rising 243,000 in January, the most in nine months, and 203,000 at the end of 2011, according to the median projection of 55 economists surveyed by Bloomberg News. It would mark the strongest three- month stretch in almost a year. The jobless rate probably held at an almost three-year low of 8.3 percent.
Bigger employment and wage gains would go further in bolstering household spending, which accounts for about 70 percent of the economy and is threatened by higher fuel costs. Federal Reserve Chairman Ben S. Bernanke said last week that while the labor market is making progress restoring the 8.7 million jobs lost as a result of the recession, it’s “far from normal.”
“There is a much more encouraging labor-market backdrop for the consumer in early 2012,” said Conrad DeQuadros, senior economist at RDQ Economics LLC in New York. “But economic growth is moderate, which leaves the unemployment rate fairly elevated by year-end, and that’s the Fed’s main focus.”
The Labor Department report is due March 9. Payroll estimates in the Bloomberg survey ranged from increases of 130,000 to 275,000. The January gain was the biggest since last April, when employers hired 251,000 more employees. Employment in December rose 203,000.
Another report may show the services industry, which makes up almost 90 percent of the economy, expanded near the fastest pace in a year.
Private payrolls are forecast to expand by 220,000, after a 257,000 gain in January that was also the highest in nine months, according to the survey median. Factory payrolls are projected to rise by 20,000 after a 50,000 gain.
Caterpillar Inc., based in Peoria, Illinois, is building and expanding factories as demand for trucks and shovels used in mines rises and old equipment is replaced in the U.S. and Europe. The world’s largest maker of construction and mining equipment said it will build a one-million-square-foot factory in Georgia, which will employ 1,400 workers. The plant, which will make tractors and excavators, will support an additional 2,800 positions in the U.S.
“We are making a series of investments around the world,” Doug Oberhelman, chairman and chief executive officer of Caterpillar, said in a Feb. 17 statement. Oberhelman is shifting production of the machines to the U.S. from Japan to be closer to customers, the company said in November.
The labor-market recovery has gained momentum in recent months. Since August, unemployment has dropped 0.8 percentage point in five months. It was last below 8.3 percent in January 2009, when 7.8 percent of the labor force was unemployed.
Dismissals have also waned, a sign companies may be growing more confident about the economic outlook. Applications for unemployment benefits declined last week to 351,000, matching the lowest level since March 2008. Five months ago they were consistently above 420,000, Labor Department data show.
Macy’s Inc., the second-biggest U.S. department-store chain, may hire about 4,000 new employees this year, matching the number of additions it made last year.
“Given that our business is growing, we are of course hiring,” Jim Sluzewski, a spokesman for the Cincinnati-based retailer, said in a Feb. 17 e-mail.
The payroll gains are translating into growing incomes, laying the groundwork for a pickup in household spending. Wages and salaries in the third and fourth quarters of 2011 grew a combined $197.3 billion, the most since the six months ended March 2007, according to the Commerce Department’s revised figures released last week. At the least, the wage gains will help Americans weather gasoline prices that have increased 46 cents this year through March 1 to $3.74 a gallon, according to AAA, the nation’s largest motoring organization.
Higher stock prices alongside an improving labor market are helping push up consumer confidence. The Standard & Poor’s 500 Index has gained almost 9 percent so far this year.
Even with “positive developments” in the job market, Bernanke told lawmakers last week the “modest and uneven” expansion needs the support of monetary policy. The central bank said in January that economic conditions are likely to warrant low interest rates at least through late 2014.
Bernanke on Jobless Rate
“The unemployment rate remains elevated, long-term unemployment is still near record levels and the number of persons working part time for economic reasons is very high,” Bernanke said during a Feb. 29 testimony to Congress. Fed policy makers judge “that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” for stable prices and maximum employment, he said.
The so-called underemployment rate, which includes part- time workers who’d prefer a full-time position and those who want work but have given up looking, was 15.1 percent in January.
Also this week, the Institute for Supply Management’s gauge of non-manufacturing companies eased in February to 56.2 from 56.8 the prior month, which was the highest since February 2011, according to the median estimate in the Bloomberg survey. Measures greater than 50 signal growth. The Tempe, Arizona-based group will release the figures tomorrow.