U.S. employment growth likely rebounded from a 17-month low in March as milder weather boosted activity in sectors like construction, which could further allay fears of a sharp slowdown in economic growth in the first quarter. Worsening worker shortages and lingering effects of tighter financial market conditions at the turn of the year, however, suggest the job gains probably remained below 2018’s brisk pace.
The Labor Department’s closely watched monthly employment report on Friday would follow on the heels of fairly upbeat construction spending and factory data that led Wall Street banks to boost their growth estimates for the first quarter. Nonfarm payrolls probably increased by 180,000 jobs last month, according to a Reuters survey of economists. Investors will also be watching to see if February’s paltry 20,000 job count, the smallest since September 2017, is revised higher.
The economy has shifted into lower gear as stimulus from the Trump administration’s $1.5 trillion tax cut package as well as increased government spending fades. A trade war between Washington and Beijing, and slowing global growth have also taken a toll on the economy, which in July will celebrate 10 years of expansion, the longest on record. Growth forecasts for the first quarter are between a 1.4 percent and 2.1 percent annualized rate. The economy grew at a 2.2 percent rate in the fourth quarter, stepping down from the July-September quarter’s brisk 3.4 percent pace. Fears of an abrupt economic slowdown could also be assuaged by strengthening wage growth and a low unemployment rate. Average hourly earnings are expected to have increased 0.3 percent in March after jumping 0.4 percent in February.
U.S. job growth seen accelerating from 17-month trough, Reuters, Apr 05