Jobs growth seen rebounding in April
WASHINGTON (Reuters) - Hiring by U.S. employers likely rebounded in April, which could ease worries the economy has stumbled into a soft patch.
Businesses outside the farm sector are expected to have added 170,000 jobs last month, according to a Reuters survey, after rising a meager 120,000 in March. The unemployment rate is seen holding at a three-year low of 8.2 percent.
"It will allay any fears regarding a lapse in the economy," said Millan Mulraine, an economist at TD Securities in New York.
A rebound in hiring would bring some relief for President Barack Obama, who is under pressure to boost employment ahead of his November re-election bid.
It also could make further support for the economy from the Federal Reserve less likely. The chairman of the U.S. central bank, Ben Bernanke, said last week that monetary policy was "more or less in the right place" even though the Fed would not hesitate to launch another round of bond purchases if the economy were to weaken.
Wall Street economists took that as a sign that odds are pretty slim the Fed, which has already bought $2.3 trillion in bonds in two rounds of so-called quantitative easing, will step in again.
"The bar for QE3 is pretty high," said Marc Chandler, a currency strategist at Brown Brothers Harriman in New York.
Economists expect a rebound in hiring because they believe the reading in March was largely an anomaly rather than a sign of underlying economic weakness. According to that line of thinking, mild weather earlier in the year led employers to bring forward hiring at the expense of March.
Now, forecasters think the impact from weather has mostly run its course. Indeed, the consensus forecast for April is just below the average rate of job gains over the prior six months.
But even though other sectors of the economy have recently looked relatively robust, and support the case for a rebound in hiring, the March jobs figure has continued to cast a cloud over the outlook.
RETAIL AND CONSTRUCTION
Data on factory activity this week, however, helped ease concerns the economy had lost momentum at the start of the second quarter.
U.S. manufacturing grew in April at the strongest rate in 10 months, the Institute for Supply Management said on Tuesday.
ISM's gauge of factory employment rose to its highest level since last June, which bodes well for the jobs report that will be released by the Labor Department at 8:30 a.m. (1230 GMT) on Friday.
The report is expected to show the private sector accounted for all the job gains in April, adding 175,000 new positions, with manufacturing enjoying another month of strong gains.
Public payrolls are expected to contract for the seventh time in eight months as state and local governments struggle with funding shortfalls, though the pace of public sector job losses is slowing.
Average hourly earnings are seen rising 0.2 percent, while the length of the average work week is seen steady at 34.5 hours.
Payroll gains in construction and in retail will be scrutinized closely for any signs that weather is clouding the picture given by the overall increase in jobs.
Hiring in retail and construction slumped in February and March after posting strong gains early in the winter. A stronger performance in April might suggest that the weather effect is receding.
(Editing by Leslie Adler)
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