Fourth straight month of strong US hiring expected
WASHINGTON (AP) — The U.S. economy probably generated more than 200,000 jobs in March, capping the best four months of hiring since before the recession.
Economists expect that U.S. employers added 210,000 jobs last month and that the unemployment rate remained at 8.3 percent for the third straight month, according to a survey by FactSet.
The Labor Department will release the March employment report at 8:30 a.m. Eastern time.
If the forecast proves correct, the economy would have added an average of 236,000 jobs per month since December. That's the most for a four-month period in almost six years. It would also mark the first time the economy has created at least 200,000 jobs in four straight months since early 2000.
"The labor market is steadily, if slowly, strengthening," says Steven Wood, chief economist at Insight Economics.
Stock markets will be closed and bond markets will close early for Good Friday.
An improving job market could boost President Barack Obama's chances of winning a second term. This year's election is expected to hinge on the state of the economy.
Former Massachusetts Gov. Mitt Romney, the likely Republican challenger, this week blamed the president's policies for slow growth and high unemployment.
The Obama campaign has said that Romney would reinstate policies that led to the recession — lower taxes for the wealthy and less regulation for business.
For many, what matters most is the unemployment rate. It was 7.8 percent when Obama entered office in January 2009 and peaked at 10 percent nine months later. Since August, it has dropped from 9.1 percent to 8.3 percent, the lowest level in three years.
No incumbent since World War II has faced voters with unemployment higher than 7.8 percent.
Other data suggest the economic recovery is gaining strength. The number of Americans seeking unemployment benefits fell last week to a four-year low, the government said Thursday. Consumers are more confident. In February, they stepped up spending by the most in seven months.
The service sector expanded at a healthy clip in March and increased hiring, according to a private survey released Wednesday by the Institute for Supply Management. A separate ISM survey of manufacturers found that factories also added jobs and boosted production last month.
Companies are investing more, boosting factory output. Businesses ordered more machinery, equipment and other capital goods in February.
Still, some economists worry that the recent job gains won't last. "We expect some slowing from the recent pace," says Dean Maki, chief U.S. economist at Barclays Capital.
Unseasonably warm weather in February allowed construction firms and other companies to work outdoors and hire workers ahead of schedule, potentially stealing jobs from future months. That's one reason March job growth isn't expected to match February's 227,000 figure.
Others worry that a 66-cent run-up in gasoline prices (to a national average $3.94 a gallon) so far this year will discourage consumer spending — though American households are more resilient financially after cutting their debts.
Federal Reserve Chairman Ben Bernanke has cautioned that the job market remains weak despite several months of strong hiring. He and other economists don't expect the unemployment rate to keep falling at its current pace without much stronger economic growth.
Most economists expect annual growth this year of just 2.5 percent. Normally, it takes annual growth of 4 percent to lower the unemployment rate 1 percentage point over a year.
The job market is improving largely because the pace of layoffs has fallen sharply. The staffing firm Challenger, Gray & Christmas reported Thursday that planned layoffs fell 27 percent from February to March. Hiring, meanwhile, is still running nearly 20 percent below pre-recession levels.
When the Great Recession hit, companies slashed their work forces. The employees who survived the layoffs had to pick up the slack. Squeezing more out of fewer workers, companies enjoyed a surge in productivity. But it may have reached its limit. Productivity growth has slowed, suggesting that companies may have to hire more workers, instead of working existing staffs harder, to keep up with customer orders.
"They're at the point that if their sales grow they're going to have to add people," says Bruce McCain, chief investment strategist at Key Private Bank.