U.S. job gains seen strong again in March
By Andrea Hopkins
WASHINGTON, March 30 (Reuters) - U.S. employers likely added about 220,000 jobs in March, notching another strong month of hiring after a hefty 262,000 gain in February, but analysts warned weather-related volatility could affect the numbers.
After months of disappointing job growth, analysts were pleasantly surprised by February's hiring surge and predict only slightly slower growth in March. Most believe the economy is on track to add more than 2 million jobs this year.
"I don't think there is any reason to believe there's been any setback in the labor market," said Ken Mayland, president of ClearView Economics.
The median estimate from a Reuters survey of 30 analysts is for 220,000 new jobs in March, with forecasts ranging from a gain of 180,000 to 275,000. The unemployment rate is expected to drop to 5.3 percent from 5.4 percent in February.
The Labor Department's closely watched payrolls report, due at 8:30 a.m. EST (1230 GMT) on Friday, is also expected to show a 0.2 percent increase in average hourly earnings and a slight lengthening of the workweek to 33.8 hours.
Experts point to recent data that show layoffs have slowed, factories are humming, and consumer sentiment and spending is buoyant despite a pickup in energy prices and inflation.
Even though Mayland is predicting a gain of 225,000 jobs in March -- in line with other forecasters -- he said would not be surprised by a sudden hiring surge.
"Some month is going to come along here where we're going to see a 350,000 or 400,000 job gain," Mayland said.
STORM CLOUDS
There are some notes of caution about March, however -- and most of it comes down to weather.
David Resler, chief economist at Nomura Securities, said February's 262,000 gain was partly a bounceback from January's disappointing 132,000 growth, and he predicted March hiring somewhere between the two at about 190,000.
"It's our judgment that last month was primarily a makeup for the weather-related weakness in January, and if you look at the two months together ... we think we're in an economy that's generating that kind of job growth," Resler said.
Steve Stanley, chief economist at RBS Greenwich Capital Markets, is also on the lookout for some volatility in March.
"Our feeling is that the weather was bad during the survey week, which should have knocked down hiring in some industries, most notably construction," Stanley said in a research note.
The payrolls report is based on a survey of 160,000 businesses and government agencies conducted in the pay period containing the 12th of the month. In the second week of March, a storm brought colder-than-usual temperatures and as much as a foot of snow to the U.S. Northeast.
Data measuring layoffs have also been mixed. While new claims for unemployment benefits were just 321,000 in the week ended March 12, a report by employment consulting firm Challenger, Gray & Christmas showed planned job cuts rose 17 percent in February.
Paul Ashworth, senior international economist at Capital Economics, said the Challenger report is worrying because the data is not adjusted for seasonal factors and does not take into account that businesses generally announce more job cuts at the start of a quarter.
"We would have hoped for a big decline in February," Ashworth said. "The Challenger survey is now pointing to a much more modest gain of less than 100,000 in payrolls, compared to the 225,000 or so that it was signaling last month."
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