June 20 (Bloomberg) -- The U.S. economy may be on the cusp of a pickup in productivity that will make it more difficult for Federal Reserve policy makers to reduce unemployment.
After cooling throughout last year, worker output per hour will probably rise at around 1.5 percent, in line with its long-run trend, according to economists like Ellen Zentner and Robert Gordon. That means the lower-than-forecast payroll gains in May and April may be closer to the norm than the exception for the rest of the year as companies redouble efforts to improve efficiency.
Payrolls will grow between 80,000 and 120,000 per month, less than this year’s 165,000 average, even as the economy expands by about the same 2 percent, estimates Zentner, a senior economist at Nomura Securities International Inc. Fed Chairman Ben S. Bernanke, meeting with the Federal Open Market Committee’s other members today to discuss monetary policy, earlier this year aired his concern that hiring will subside without faster economic growth.
“As the rate of productivity normalizes, businesses won’t need to hire as many workers,” said New York-based Zentner. “The level of job growth we’ve been getting over the past few months is probably pretty normal.”
Stocks fell as investors awaited the Fed’s announcement on whether it will boost the economy. The Standard & Poor’s 500 Index dropped 0.1 percent to 1,356.08 at 10:10 a.m. in New York.
Elsewhere today, the Monetary Policy Committee of the Bank of England voted to keep its bond-buying target at 325 billion pounds ($511 billion). The 5-4 decision put BOE Governor Mervyn King, who sought to boost stimulus as jobless claims rise and the risk from Europe’s debt crisis grows, in the minority for the first time since 2009.
Japan reported its first trade deficit with the European Union since the Finance Ministry began tracking data in 1979 as the debt crisis limited a rebound in Japanese exports.
Employers in the U.S. added 69,000 workers to payrolls in May, the least in a year, lowering the average pace of job creation in 2012 to about 165,000, figures from the Labor Department show. Zentner projected a 95,000 increase, the second-lowest in a Bloomberg News survey of 87 economists, after factoring in a rebound in productivity.
The jobless rate last month climbed to 8.2 percent from April’s 8.1 percent. It has held above 8 percent for 40 consecutive months, the longest stretch of such elevated levels in the post-World War II era.