May 3, 2011 / 6:10 PM / 8 years ago

PREVIEW-High gasoline prices seen slowing US April hiring

 WHAT: U.S. employment report for April
 WHEN: Friday, May 6, at 8:30 a.m. EDT (1230 GMT)
 REUTERS FORECASTS:
                   NONFARM PAYROLLS       PRIVATE PAYROLLS
 Median            +186,000               +200,000
 Minimum           +118,000               +148,000
 Maximum           +325,000               +350,000       
 Prior             +216,000               +230,000
 -------
 UNEMPLOYMENT RATE   AVG WORK WEEK       AVG HRLY EARNINGS
 Median     8.8 percent    34.3 hours     +0.2 pct
 Minimum    8.6 percent    34.3 hours     +0.1 pct
 Maximum    9.0 percent    34.4 hours     +0.5 pct
 Prior      8.8 percent    34.3 hours     +0.0
 ------
 FACTORS TO WATCH:
 U.S. payroll growth likely eased in April as employers
responded to rising gasoline prices by scaling back on hiring.
 Slower economic growth in the first quarter will also be
felt in April's employment report, expected to show employers
added 186,000 jobs after expanding payrolls by 216,000 in March
-- which was the most in 10 months. Still, payrolls will have
grown for seven straight months.
 High energy costs held back the economy to an annual growth
rate of 1.8 percent, braking sharply from a 3.1 percent clip in
the fourth quarter. The price of gasoline for all grades rose
6.6 percent or 24 cents per gallon in April from March.
 The anticipated slowdown in job creation was telegraphed by
rises in applications for state unemployment benefits, as well
as the four-week average of claims.
 The rise in claims between the March and April survey
period was a combination of technical factors and supply-chain
disruptions related to the devastating earthquake and tsunami
in Japan.
 Though some auto makers briefly closed plants and reduced
hours because of part shortages, they would not necessarily
have laid off workers. The Institute for Supply Management
survey showed a dip in the employment gauge.
 The moderation in employment is expected to be temporary,
with energy prices seen leveling off in the summer. Economists
expect the economy to regain speed in the second quarter, with
the labor market taking up some of the burden for growth.
 Although there were five weeks between the March and April
survey period, rather than the normal four weeks, that should
not have an impact on the payrolls figure as the Bureau for
Labor Statistics' seasonal adjustment factor should take this
into account.
 The unemployment rate is seen steady at a two-year low of
8.8 percent in April, but could rise as those workers who have
dropped out of the labor force return. The jobless rate has
declined a full percentage point since November, the largest
four-month decline since February 1984.
 The private sector will likely account for all of the jobs
created in April, with employers expected to have hired 200,000
new workers -- building on March's 230,000 gain. Though private
payrolls have grown for 13 straight months, they are still
roughly 7 million below their pre-recession levels.
 The economy has recovered only a fraction of the more than
8 million jobs lost in the 2007-2009 recession. Job growth of
between 250,000 and 300,000 a month is needed to have a sizable
impact on the pool of 13.5 million jobless Americans.
 The unemployment rate is being closely watched by the
Federal Reserve, which last month signaled it was in no hurry
to start withdrawing the massive stimulus it has lent the
economy, The U.S. central bank lowered its projection for
unemployment for this year and 2012.
 Government employment is expected to have shrunk for a
sixth straight month in April.
 Employment gains last month were most likely in the private
services sector, which accounts for more than 80 percent of
U.S. economic activity. Goods-producing industries payrolls
likely slowed again in April, with construction employment
probably declining and manufacturing hiring moderating
somewhat.
 The employment report is also expected to show the average
work week unchanged at 34.3 hours for a third straight month
and no sign of wage inflation, with average hourly earnings
rising 0.2 percent after being flat in March.
 (Polling by Bangalore unit; Reporting by Lucia Mutikani;
Editing by James Dalgleish)


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