You would think that after the labor market has been recovering for more than a year, making accurate predictions about each month's direction of job growth would be easy. In a recovery, the growth should continue briskly, right? While that's often the case, this labor market recovery has been uneven. In March and April 2010, we saw big job gains. Then, the numbers dropped off for some time and slowly crept back up through the end of the year. In January, hiring slowed again, only to pick up a little more briskly for the past two months.
How will April fit in? We'll know for sure tomorrow. At this time, we've got a few early reports that provide a preview.
First, there's the government's data on unemployment insurance benefits, via the Department of Labor. The results for April weren't great. For the four weeks ending April 30th, average initial unemployment claims were 438,000, an increase of 44,800 compared to the five weeks ending April 2nd. Continuing claims provided a little more reason for optimism, as they declined by 40,200 to 3.7 million for the four weeks ending April 30th, compared to the prior 5-week period's average. Unfortunately, this could just indicate that more long-term unemployed Americans are exhausting their jobless benefits instead of finding employment.
Payroll specialist ADP provided slightly cheerier (.pdf), but still relatively lukewarm, data for April. Yesterday, it reported 179,000 private sector jobs added during the month. That might not sound so bad, but it's actually the fewest since November 2010. Of course, its estimate and that "official" number provided by the government don't always match.
There's a bit more positive news provided by outplacement firm Challenger, Gray & Christmas (.pdf). Its layoffs report for April shows planned job cuts dropping 12% during the month, the fewest so far in 2011.
So firms appear to be firing fewer workers than they did earlier in the year but are they hiring as aggressively? You need both aspects of the labor market working in sync to result in more jobs added to the economy. At this time, economists believe the number of jobs added in April will be somewhere around 175,000. That would be weaker than both February and March's results. A sub-200,000 total would indicate that the jobs continue to grow, but at a slow space relative to what's needed to whittle down the very high national unemployment rate of 8.8%.
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