By Timothy R. Homan March 5 (Bloomberg) — The U.S. unemployment rate held at 9.7 percent and payrolls fell less than forecast, indicating the labor market strengthened even as East Coast snowstorms forced some employers to temporarily close. Payrolls dropped by 36,000 last month after a revised 26,000 decrease in January, a Labor Department report showed today in Washington. Manufacturers added workers for a second straight month, the first back-to-back gain since 2006, while construction companies fired workers. Stocks and the dollar rallied while Treasuries slid as investors reckoned the economy would have added jobs were it not for seasonal snowfall records in cities including Baltimore and Philadelphia. The U.S. needs employment growth to sustain a recovery from a recession that has cost 8.4 million jobs since December 2007. “We do have an economic recovery, it’s certainly uneven, but it’s there,” said John Silvia , chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast unemployment would be unchanged. “The job market is still continuing to improve for those that have the skills.” The Standard & Poor’s 500 Index rose 1.4 percent to close at 1,138.7. The dollar strengthened 1.5 percent to 90.3 yen at 4:56 p.m. in New York from 89.02 late yesterday. The yield on the 10-year Treasury note rose eight basis points to 3.68 percent. Payrolls were forecast to decrease by 68,000, according to the median estimate of 82 economists surveyed by Bloomberg News. The jobless rate was projected to increase to 9.8 percent. Technology Services Among companies adding workers is Accenture Plc, the world’s second-largest technology-services provider, which plans to boost payrolls by about 50,000, with as many as 9,000 jobs being added in the U.S. by the end of August. “We are seeing a very broad uplift globally” in demand, John Campagnino , director of worldwide recruiting, said in a March 3 interview. He said the trend “brings us right back to the pre-recession” levels. The number of temporary workers increased by 48,000 in February, the fifth straight monthly gain. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff. Christina Romer , President Barack Obama ’s chief economist, told Bloomberg Television that it’s “very realistic” to expect employment growth in the U.S. in the next few months. Even so, “anyone that goes out and talks to people across this country knows that the labor market is still very distressed.” Factory Payrolls Factory payrolls increased 1,000 in February after rising 20,000 in the prior month. The median forecast by economists called for a drop of 15,000. Payrolls at builders fell 64,000 after decreasing 77,000. Financial firms reduced payrolls by 10,000 after a 13,000 decline. The labor market may be slow to recover from the biggest slump since World War II, giving the Federal Reserve scope to keep interest rates low and putting pressure on Obama and lawmakers to foster job growth. “A lot of people are not seeing the kind of job gains or income gains that they are looking for,” said Wells Fargo’s Silvia. “There is going to be a lot of dissatisfaction with politicians and that is giving rise to this political angst.” Many companies have been reluctant to hire even after the world’s largest economy grew at a 5.9 percent annual rate in the last three months of 2009, the most in six years. Underemployment Rate Economists surveyed by Bloomberg last month projected the jobless rate will average 9.8 percent in 2010 and end the year at 9.5 percent. The underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — rose to 16.8 percent from 16.5 percent. The number of part-time workers for economic reasons climbed to 8.8 million in February from 8.3 million the previous month Two storms blanketed parts of the country in early February, the second coming during the week that included the 12th of the month, the government’s survey week. Today’s report showed 1 million Americans said bad weather prevented them from getting to work during the survey week. About 290,000 people on average say bad weather has prevented them from getting to work, according to February figures going back three decades. Economists at Macroeconomic Advisers LLC in St. Louis projected the weather would reduce the payroll count by anywhere from 150,000 to 220,000 workers. The drop will probably be reversed this month, they said. January 1996 The most recent storm of similar intensity that occurred during a survey week was in January 1996. The current data for payrolls that month, which have gone through several revisions since the initial estimate, show a 19,000 drop in employment followed by a gain of 434,000 in February. Government payrolls decreased by 18,000 in February. State and local governments reduced employment by 25,000, while the federal government added 7,000. The increase at the federal level reflected in part the hiring of 15,000 temporary workers to conduct the 2010 census. The Census Bureau said it will hire 1.15 million temporary workers in the first half of the year to conduct the population count that takes place every 10 years. The program may have the biggest impact on payroll figures in April through June, when the bulk of the hiring will take place, and will then subtract from the job count the following months after the work is done. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
