Credit-spurred job growth to ease blow from U.S. cuts

Stocks Fall

Stocks fell on concern changes in China’s government policy may slow growth and hurt the global recovery. China’s Cabinet on March 1 called for higher down payments and interest rates for second-home mortgages in some cities. The Standard & Poor’s 500 Index retreated 0.1% at 10:42 a.m. in New York, and the the MSCI All-Country World Index lost 0.2%.

The pace of employment in the U.S. was probably little changed last month, according to a survey of economists ahead of Labor Department figures on March 8. Payrolls climbed by 160,000, the median forecast in the Bloomberg survey, after a 157,000 gain the prior month. The jobless rate is projected to hold at 7.9%.

Easier credit may stimulate bigger gains in hiring even if President Barack Obama and Congress fail to reach a compromise on replacing $1.2 trillion of budget cuts over the next nine years.

A net 19.1% of banks reported increasing demand for commercial and industrial loans in the fourth quarter of last year, compared with a net 6.2% that reported a drop in the prior period, according to the Fed’s survey of senior loan officers issued last month.

Prime Mortgages

“Aggressive competition” among lenders prompted banks to ease standards or terms, the central bank said. Demand strengthened for business loans, prime residential mortgages, commercial real estate lending and auto loans, according to the survey conducted from Dec. 27 to Jan. 15.

Household debt climbed by $31 billion, or 0.3%, to $11.3 trillion in the fourth quarter as student and auto loans rose along with credit-card balances, according to a Federal Reserve Bank of New York report last week. It was the first pickup in borrowing in seven quarters and only the second since 2008.

Kristin Jakiel, 29, and her husband Nicholas Jakiel, 30, bought a red 2012 Chevy Cruz LT from Tom Henry Chevrolet in Bakerstown, Pennsylvania, on Feb. 23. The couple got an $18,944 auto loan from Ally Financial Inc. after qualifying for a $123,000 30-year mortgage at 3.8% to buy a new town home in Canonsburg, Pennsylvania, in July.

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