US jobs, factory data offer hope for economy
By Steven C. Johnson and Lucia Mutikani, ReutersWASHINGTON -- U.S. private employers hired more workers than expected in February and demand for a range of factory goods was solid in January, hopeful signs for the economy as it deals with higher taxes and deep government budget cuts.
March 8, 2013, 1:23 pm TWN
The reports on Wednesday suggested economic activity picked up after it stalled in the final three months of 2012.
“They provide some signs that the economy is doing a little bit better,” said Michael Strauss, chief economist at Commonfund in Wilton, Connecticut.
Private employers added 198,000 jobs to payrolls last month, the ADP National Employment Report showed, handily beating economists' expectations for an increase of 170,000. There were solid gains in construction, where payrolls rose by 21,000.
Adding to the report's firm tone, January's count was revised to show 23,000 more jobs added than previously reported. The report is jointly developed with Moody's Analytics.
“It feels like underlying job growth continues to improve, and at the current pace, this should be enough to start bringing down unemployment,” said Mark Zandi, chief economist at Moody's Analytics. The jobless rate is currently at 7.9 percent.
“In a really rip-roaring economy, we'd be creating closer to 300,000 jobs a month or a bit north of that. So we're not there yet, but we're moving in the right direction,” he said.
A separate report from the Commerce Department showed orders for manufactured goods dropped 2 percent, weighed down by a plunge in demand for transportation equipment.
But orders excluding the volatile transportation category increased a healthy 1.3 percent, pointing to underlying strength in a sector that carried the economy out of the 2007-09 recession.
The department also said nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased by a more robust 7.2 percent in January instead of 6.3 percent, as it reported last week.
That optimism was also captured in the Federal Reserve's Beige Book, which showed growth improving gradually in January and early February, largely thanks to a broad-based housing market recovery.