Friday is jobs day in America.
Economists are anticipating a rebound in job growth after an unexpected dip in March capped off what we now know was the worst quarter for the US economy in three years.
Via Bloomberg, here’s what Wall Street is expecting for April:
- Nonfarm payrolls: +190,000
- Unemployment rate: 4.6%
- Average hourly earnings month-on-month: +0.3%
- Average hourly earnings year-on-year: +2.7%
- Average weekly hours worked: 34.4
To recap, the economy added 98,000 jobs in March and the unemployment rate fell to a postcrisis low of 4.5%. That rate supports the view that the economy is near full employment: a situation in which most workers actively looking for a job have one. It also means the pace of job creation could slow and wages could go up.
Average hourly earnings rose 2.7% year-on-year, just below the post-recession record of 2.8% set in February. That’s likely part of what prompted the Federal Reserve to conclude in its meeting this week that the underlying drivers of consumption are “solid,” and first-quarter weakness was “transitory.” The Fed will have the April and May jobs reports on hand before its meeting next month at which markets expect it will raise interest rates.
In March, the labour-force participation rate was unchanged from the prior month at 63%. “One group that has been rejoining the labour force is prime age (ages 25-54) men and women without a college degree,” said Nomura’s Lewis Alexander in a note.
“This group accounted for about half of the overall decline in the LFPR from December 2007 to March 2015.” The gain since then is small compared to the post-recession drop, but could be a reason why participation may not fall in the coming months, Alexander said.
The manufacturing sector added 11,000 jobs in March, helped in part by more comfortable weather for outdoor work.
“A risk to the forecast this month involves the possibility that payback from warm winter may be distributed over multiple months and will spill into April, dampening growth,” Alexander said.
Weather aside, retail lost nearly 30,000 jobs and the vast majority were in large department stores. Several of them are shutting down or at risk of closing as ecommerce booms. The job losses in February and March marked the worst two-month decline since November and December 2009, and is showing scant signs of slowing down.
The monthly Challenger, Grey & Christmas report on layoff announcements released Thursday showed retail in the clear lead year-to-date, with 50,133 cuts.