5:06 AM
WASHINGTON |
WASHINGTON (Reuters) - Employment likely posted a second straight month of solid gains in March, marking a decisive shift in the labor market that should help to underpin the economic recovery.
Nonfarm payrolls rose 190,000 last month, according to a Reuters survey, after increasing 192,000 in February. The anticipated job gains come amid indications the economy suffered a minor setback early in the year as bad weather and rising energy prices dampened activity.
"All the evidence is pointing to a strengthening labor market," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
The Labor Department will release the closely watched employment report at 08:30 a.m. on Friday.
While the report will indicate sufficient underlying strength in the economy to cushion it against the impact of high energy prices, it will not be strong enough to discourage the Federal Reserve from its ultra-easy monetary policies.
Policymakers at the U.S. central bank are, however, debating whether they should start considering withdrawing some of their massive economic stimulus.
The government will revise January and February employment figures with the March report. The recent trend has been for payrolls to be adjusted upward.
The private sector will account for all the new jobs in March, with an expected 200,000 positions. Although rising energy prices -- boosted by unrest in the Middle East and North Africa -- are eroding consumer confidence, economists do not expect businesses to put the brakes on hiring just yet.
"Employment gains have been modest in recent months, so in that sense I think businesses that were initially very wary of taking on permanent full-time employees are feeling very confident now than was case some months ago," said Richard DeKaser, an economist at Parthenon Group in Boston.
"As a result they are more willing to make those kinds of long-term commitments."
STEADY UNEMPLOYMENT RATE
The strengthening labor market tenor will also be underscored by the unemployment rate, which is expected to hold steady at a near two-year low of 8.9 percent.
The jobless rate, which is derived from a survey of households, has dropped 0.9 of a percentage point since November, mostly reflecting employment gains rather than a rise in the number of discouraged job-seekers.
It could start rising as the improving employment picture coaxes those who have given up the search for work to re-enter the labor market. Some economists believe the unemployment rate could have edged down in March.
"It is always possible that as the job market improves, people will start looking again and the unemployment rate could go up," said John Hancock's Cheney. "But the normal pattern is once it starts coming down as rapidly as it has over the last few months, it keeps on going down."
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