WASHINGTON – Signs that the U.S. economy is emerging from a deep winter freeze have raised hopes that hiring accelerated in April.
Economists are mostly bullish. They forecast that the economy gained 210,000 jobs in April, according to a survey by FactSet, and that the unemployment rate dipped to 6.6 per cent from 6.7 per cent.
The government will release the April employment report at 8:30 a.m. Eastern time Friday.
If economists’ forecasts are accurate, April will have produced the largest burst of hiring since November. That would show that the economy is producing consistently solid job growth. Job gains totalled 197,000 in February and 192,000 in March.
The steady pace of hiring has encouraged more Americans to start looking for work. That’s a hopeful sign that they think their prospects for finding a job have improved. In the first three months of this year, about 1.3 million people began looking for jobs, and most have found them.
Last year, by contrast, the number of people either working or looking for work shrank by roughly 500,000.
Most of the job gains in March were in low-paying industries, a pattern than has been consistent for most of the nearly 5-year old recovery. Temporary help agencies, for example, added 28,500 jobs, hotels and restaurants 33,100 and retailers 21,300.
Recent economic reports have pointed to faster economic growth after a dismal start to the year, slowed by a brutal winter.
Consumers are ramping up spending, businesses are ordering more goods and manufacturers are expanding. The strengthening numbers show that harsh snowstorms and frigid cold in January and February were largely to blame for the economy’s scant growth at the start of the year.
The economy barely expanded from January through March, eking out an annual growth rate of just 0.1 per cent, down from a 2.6 per cent rate in the final three months of 2013. Americans spent more last quarter on utilities and health care, but their spending on goods barely rose. Businesses also reduced spending, and exports fell.
One drag on the economy appears to be the faltering housing recovery. Home building and renovation declined in the January-March quarter, slowing growth for a second straight quarter.
Builders started work on fewer homes in March than they did a year earlier. Sales and construction may rebound later this year, but economists don’t expect housing to contribute much if at all to growth.
Still, other data indicate that the economy was already rebounding in March and probably improved further in April. Auto sales jumped 8.5 per cent in April compared with the same month a year ago, the best April sales increase in nine years.
Consumers spent more at furniture stores and other retail chains. Overall consumer spending soared 0.9 per cent in March, the government said Thursday, the most in 4 1/2 years.
Economists watch consumer spending closely because it makes up about 70 per cent of economic activity.
Spending is up partly because Americans earned a bit more, and confidence has improved from the bleak winter months. Incomes rose 0.5 per cent in March, the government said, the most since August.
Consumer confidence has nearly returned to pre-recession levels, according to two surveys by the Conference Board and the University of Michigan.
Also Thursday, a private survey showed that manufacturing activity accelerated in April for a third straight month. Measures of export orders and hiring rose, and new orders increased at a healthy pace.
Businesses are also investing more in machinery and equipment after cutting back in those areas in January and December. Business orders for manufactured goods jumped in March, the government said last week.
All told, the positive news has led most economists to forecast a strong rebound in economic growth — to a 3.5 per cent annual rate in the current April-June quarter. And growth should reach nearly 3 per cent for the full year, up from 1.9 per cent in 2013, they expect.
Even the slumping housing market has reported some good news this week. Signed contracts to buy existing homes rose in March for the first time in nine months. That holds out the hope of higher sales in the months ahead.
And construction spending ticked up in March, fueled partly by more home and apartment-building.
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