5 things to watch for in Friday's US jobs report for April
WASHINGTON – After a hiring slowdown in March, the U.S. job market is thought to have resumed solid growth in April, a trend that would help underpin an economic rebound after a weak start to the year.
Employers probably added 185,000 jobs last month, according to a survey by FactSet, a data provider. That would be nearly double the 98,000 jobs added in March — a slump that economists attributed largely to a snowstorm that struck some areas of the country just as the government was collecting its hiring data.
The unemployment rate is predicted to have ticked up to 4.6 percent from 4.5 percent in March, the lowest in a decade.
The April jobs report will be released Friday at 8:30 a.m. Eastern time.
Stronger hiring would help assuage concerns that the economy is stumbling, nearly eight years into its recovery from the Great Recession. Growth slowed to an annual rate of just 0.7 percent in the January-March quarter, the government has estimated, from a 2.1 percent rate in the previous quarter.
Consumers, despite registering strong confidence, barely increased their spending last quarter. The 0.3 percent annualized rise in their spending in the January-March period was the smallest quarterly gain in more than seven years.
Car sales have also hit a rut, potentially hurting auto factories and their parts suppliers. Auto purchases fell in April for a fourth straight month — the first time that has happened since the recession.
Still, some positive signs suggest that growth is rebounding in the current April-June quarter, with some economists forecasting that it could top a 3 percent annual rate. Last quarter, consumers spent less in part because of low utility bills during an unseasonably warm winter. That's likely to prove a temporary restraint.
And the housing market is reaching new heights as home sales and construction march upward even though a limited number of properties are for sale. Sales of existing homes jumped in March to their highest level in more than a decade.
Here are five things to look for in Friday's jobs report:
HOW FAST IS PAY RISING?
Average hourly pay rose 2.7 percent in March compared with a year earlier, above the anemic levels of about 2 percent for the first few years of the recovery from the recession. Yet while improving, the increase remains below the roughly 3.5 percent annual pay gains typical of a healthy economy. Inflation has also picked up, eroding even that limited income growth. With the unemployment rate low, companies may have to pay more to attract and keep employees.
WILL MORE PEOPLE LOOK FOR WORK?
One trend that could hold back pay gains would be a flood of job-seekers coming off the sidelines and looking for work. That would give businesses more potential employees to hire, thereby reducing their need to pay more. And in the past three months, that may be what has happened: The proportion of Americans either working or looking for work has increased to 63 percent from 62.7 percent. Perhaps not coincidentally, wage gains have slipped a bit, from an annual pace of 2.9 percent in December to 2.7 percent last month.
WILL RETAIL BLEEDING CONTINUE?
Retail store chains, such as Sears and Macy's, have been slashing jobs in the face of ferocious competition from Amazon.com and other e-commerce companies. That's transformed retail to a job-losing industry: It has shed an average of 5,000 jobs a month for the past six months. That's a sharp change from its historical pattern of adding about 15,000 to 20,000 jobs a month. Many traditional retailers are rapidly building up their own online storefronts and expanding their warehousing and logistics divisions. But those functions are less labor-intensive and are unlikely to fully offset the job losses at physical stores.
Retail may get a bounce in April from improved weather, which followed some severe snowstorms in March. If so, it won't be the only industry to benefit. Construction, restaurants and hotels also absorbed hits in March because of harsh weather in much of the Northeast and Midwest. Goldman Sachs estimates that the swing could add 25,000 to 40,000 jobs to April's totals.
HOW WILL MANUFACTURING FARE?
Factories have mostly recovered over the past six months from nearly two years of struggle. Plummeting oil prices had caused drilling firms to slash orders for steel pipe, machinery and other equipment. And weak growth overseas, plus a strong dollar, depressed exports. But oil and gas prices stabilized last fall. Growth is picking up in Europe and Japan and has stabilized in China. All that has helped lift factory output. And manufacturers have added 49,000 jobs so far this year, a big improvement after the industry had shed 16,000 jobs last year.