Billionaire Warren Buffett said he was wagering on continued economic expansion and did not expect a second recession.
“I would bet very heavily against that,” Buffett told Bloomberg Television today, after data showed slowing US job growth. “How fast the recovery would come, I don’t know. I see nothing that indicates any kind of a double dip.”
US employers added 18,000 jobs last month, less than the 105,000 median estimate in a Bloomberg News survey. “It means we’re still a ways off from getting to where we should be,” Buffett said. “We’re seeing growth around the world, but it’s not mushrooming.”
Buffett’s Berkshire Hathaway Inc added about 3,000 jobs last year after cutting more than 20,000 positions in 2009. The Omaha, Nebraska-based company employed about 260,000 people at units from insurance and shipping to consumer goods and energy, Berkshire said in February. Employment at Berkshire units rose last year. These units included car insurer Geico and railroad Burlington Northern Santa Fe. Staffing fell at carpet-maker Shaw Industries.
“Jobs come with demand,” said Buffett. “We’re seeing demand a lot of places but we’re not seeing it in the construction field.”
Bricks, Carpet
Berkshire owns a real estate brokerage, a maker of manufactured homes and units that construct roofs and sell bricks and carpet. Buffett had, in February, said a housing recovery would begin “within a year or so” and that he was preparing the company’s businesses for growth.
Berkshire expanded its Acme Brick unit with a $50-million acquisition, and Johns Manville, the roofing subsidiary, is building a $55-million plant in Ohio, Buffett said in his annual letter. Shaw would spend $210 million on plant and equipment this year, Buffett said.
“We will come back big time on employment when residential construction comes back,” Buffett said. The unemployment rate will drop to six per cent “within a few years,” he said.