Economists wonder when U.S. job machine will slow

By Joanne Morrison - Analysis

WASHINGTON (Reuters) - The U.S. job market still looks healthy even though the world's richest economy has stumbled over the past few quarters, and economists wonder why the picture has not yet changed.

The economy created 455,000 nonfarm jobs over the first three months of the year, according to government data. If that rate were maintained, the United States would add a healthy 1.8 million new jobs over the course of the year.

While that would mark a slowdown from last year, when more than 2 million positions were added, economists say its a pace out of step with the sharp slowdown in economic growth.

"Job growth has an awful lot of momentum. We really don't know when it will slow down," said Kurt Karl, chief economist at Swiss Re in New York.

U.S. gross domestic product grew at a sluggish 1.3 percent annual rate in the first quarter, the weakest showing in four years, after three quarters in which it advanced, on average, at a moderate 2.4 percent pace.

Economists, and officials at the U.S. Federal Reserve, have been expecting the job market to cool as well, but so far growth in hours worked and employment has barely slowed.

A government report due on Friday is expected to show payroll growth did decelerate a bit in April. The median forecast of economists polled by Reuters is for a 100,000 job expansion in nonfarm payrolls. If the forecast proves accurate, it would be the weakest showing since January 2005.

Given softer employment growth, economists expect the jobless rate up to edge up to 4.5 percent after a surprise dip to 4.4 percent in March, marking only the slightest easing in what appears to be drum-tight labor-market conditions.