Monday, March 11, 2013

Payrolls Rise as U.S. Jobless Rate Reaches Four-Year Low

Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than first estimated, Labor Department figures showed today in Washington. The median forecast of 90 economists surveyed by Bloomberg projected an advance of 165,000. The jobless rate dropped to 7.7 percent, the lowest since December 2008, from 7.9 percent.

"It really should cause people to rethink their weak first-half growth estimates," said Drew Matus, deputy U.S. chief economist at UBS Securities LLC in Stamford, Connecticut, who correctly forecast the unemployment rate. "People counted out the U.S. consumer a little too easily on the payroll-tax increases."

Stocks, the dollar and Treasury yields all rose on signs the world's largest economy is gaining strength in the face of federal budget cuts and higher payroll taxes. The report may fuel debate among Federal Reserve policy makers considering how long to maintain record stimulus to boost growth and employment.

Matus said the report is likely to convince Fed policy makers "that they're doing exactly the right thing by stimulating the economy."

Stocks, Treasuries

The Standard & Poor's 500 Index rose 0.5 percent to 1,551.18 at the close in New York. Treasuries declined, pushing up the yield on the benchmark 10-year note to 2.04 percent from 2 percent late yesterday. The dollar extended gains versus the yen to the highest level since 2009.

Hiring in construction jumped by the most in almost six years. Payrolls also climbed at retailers and professional and business services such as temporary-help firms.

An improving labor market has enhanced the job prospects of college seniors, who are now searching for post-graduation employment. Most of those on track to graduate from the Georgia Institute of Technology in Atlanta have job offers two months before May, when they leave, said Jasmine Lawrence, 21, a computer science major who has been hired by Microsoft Corp., where she had an internship last summer.

"It is a great time for engineers right now," said Lawrence, who said she had four offers, including one from Google Inc. and Gulfstream Aerospace Corp. "Lots of companies want to hire tech students."


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