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Wednesday, July 24, 2024

Are jobs gaining in the United States?

 a help wanted sign in front of a restaurant in Richmond, Va. The U.S. economy has enjoyed a four-month stretch of robust job gains, and on Friday, April 5, 2013, the government will signal whether that trend endured into March (AP Photo/Steve Helber)
A help wanted sign in front of a restaurant in Richmond, Va.
(AP Photo/Steve Helber)

The U.S. economy has enjoyed a four-month stretch of robust job gains, and on Friday the government will report whether that trend endured into March.

Economists generally think it did. They predict that employers added a solid 195,000 jobs, according to a survey by FactSet. That’s a healthy gain, although below February’s 237,000 net jobs added.

The unemployment rate is expected to remain at a four-year low of 7.7 percent.

The Labor Department will release the report at 8:30 a.m. EDT Friday.

Job gains have accelerated to an average of 205,000 per month from November through February. That’s nearly double the monthly gains from last spring. The forecast figure for March would continue that trend.

Still, several subpar economic reports this week have signaled that the job market may have weakened last month. That could mean companies are worried about government spending cuts that began on March 1.

Services companies hired at a slower pace in March, according to the Institute for Supply Management, a trade group.

Payroll processor ADP said private employers added just 158,000 jobs in March, down from the survey’s estimate of 237,000 jobs in February.

And on Thursday, the government said the number of people seeking unemployment benefits rose last week for the third straight time and to the highest level in four months. That could mean layoffs have increased. The government cautioned that seasonal factors may have also contributed to last week’s gain.

Analysts noted that the ADP survey is not always an accurate predictor of the government’s more comprehensive figures. Still, some economists lowered their forecasts for March job growth after seeing the reports. A few predict the job gains could be closer to 150,000.

Overall, economic growth likely perked up considerably in the January-March quarter after barely expanding in the final three months of last year. Most economists expect growth will top 3 percent in the first quarter. It grew only 0.4 percent in the October-December quarter.

Americans appear to have shrugged off an increase in Social Security taxes that began in January. Consumers boosted their spending in February by the most in five months.

Consumers have been aided by the Federal Reserve’s efforts to keep interest rates low. That has spurred higher sales of homes and cars. Many homeowners have also refinanced their mortgages at much lower rates, freeing up more money to spend on other items.

The housing market is recovering steadily. In February, sales of previously owned homes reached the highest level in more than three years. And home prices nationwide rose by the most in seven years that month compared with the same month a year ago. Builders broke ground on new homes at the second-fastest pace in nearly five years.

Still, many economists worry that growth will slow in the spring and summer because of the $85 billion in automatic government spending cuts.

Economists expect the spending reductions will shave half a percentage point off economic growth this year. Many federal workers will experience pay cuts. And government contractors will likely cut jobs. That could also drag down overall monthly hiring.

Mark Vitner, an economist at Wells Fargo Securities, expects that the economy expanded at a 3.2 percent annual rate in the first quarter. But he forecasts growth will slow to a 2 percent pace in the second quarter, and then rebound after the impact of the government spending cuts fades.


Copyright 2013 The Associated Press. All rights reserved.

Copyright 2013 Capitol Hill Blue

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