WASHINGTON, May 1 (Reuters) - Hiring by U.S. employers likely rebounded in April, which could ease worries the economy has stumbled into a soft patch.
Businesses outside the farm sector are expected to have added 170,000 jobs last month, according to a Reuters survey, after rising a meager 120,000 in March. The unemployment rate is seen holding at a three-year low of 8.2 percent.
'It will allay any fears regarding a lapse in the economy,' said Millan Mulraine, an economist at TD Securities in New York.
That's the view that emerges from an Associated Press survey of 32 leading economists who foresee a gradually brighter jobs picture. Despite higher gas prices, Europe's debt crisis and a weak housing market, they think the economy has entered a "virtuous cycle" in which hiring boosts consumer spending, which fuels more hiring and spending.
The survey results come before a report Friday on hiring during April. The April report is eagerly awaited because employers added surprisingly few jobs in March. That result contributed to fears that the economy might struggle to sustain its recovery.
U.S. economic indicators don’t add up.
The unemployment rate has plunged to 8.2 per cent from 9.8 per cent over the last couple of years. That’s a big drop. Yet the economy is only growing at a moderate rate. Gross domestic product hasn’t expanded at an annual rate faster than 3 per cent in seven quarters through the one that just ended in March.
MUCH as we've been talking about the meaning and importance of a rigid 2% inflation target in America, it would be useful to have a tangible example to help illustrate the point. Kathleen Madigan obliges:
The market for rental units is out of whack. The supply among rental housing is the tightest in more than a decade as only 8.8% of units were vacant in the first quarter. And given the steep fall in homeownership rates in the U.S., the demand for rental units is the highest in 15 years. The imbalance isn’t just a headache for those seeking to lease a home. It could cause a migraine for Federal Reserve officials.
The market for rental units is out of whack. The supply among rental housing is the tightest in more than a decade as only 8.8% of units were vacant in the first quarter. And given the steep fall in homeownership rates in the U.S., the demand for rental units is the highest in 15 years.
The imbalance isn’t just a headache for those seeking to lease a home. It could cause a migraine for Federal Reserve officials.
The U.S. homeownership rate fell to the lowest level in 15 years in the first quarter as borrowers lost homes to foreclosure and tighter inventory and credit kept buyers off the market.
The rate dropped to 65.4% from 66% in the fourth quarter and fell a full percentage point from a year earlier, the U.S. Census Bureau said in a report Monday. That is the lowest level since the first quarter of 1997, and down from a record 69.2% in June 2004.
Disappointing, but not shocking. The government’s report Friday that the economy created fewer jobs than expected in April—115,000—showed an unwelcome deceleration of America’s job-creating machine. Economists surveyed by Bloomberg News had a median forecast of 160,000 jobs created. In the big picture, though, the nearly 3-year-old expansion is proceeding at the same pace as the previous two. Slow recovery, in other words, is the New Normal.
As always, the infamous chart from Calculated Risk.
It compares the pace of this jobs recovery vs. every other one since WWII by looking at the trajectory of jobs lost and gained since the recession began.
What if the conventional wisdom about the mortgage crisis is all wrong?
That’s the implication of a new paper from economists at the Federal Reserve Banks of Atlanta and Boston that’s bound to spark debate because, if their premises are correct, it sharply undercuts the justification for much of the new regulation that’s been erected over the past two years.
Three economists, Christopher Foote, Kristopher Gerardi, and Paul Willen, present two narratives of the financial crisis in trying to answer why so many people made so many dumb decisions.
The classic eponymous Beveridge Curve “is a graphical representation of the relationship between the unemployment rate and the job vacancy rate. It typically has vacancies on the vertical axis and unemployment on the horizontal. The curve slopes downwards as a higher rate of unemployment normally occurs with a lower rate of vacancies. If it moves outwards over time, then a given level of vacancies would be associated with higher and higher levels of unemployment, which would imply decreasing labor market efficiency. Inefficient labor markets are due to mismatches between available jobs, the unemployed and an immobile labor force.” (Wikipedia definition)
Specifically, Romney suggests that we should be creating 500,000 jobs a month--a job creation rate that, as Krugman observes, is rare to say the least.
(For context, excluding the first year of the Obama Administration, during which the country was still in the depths of the Great Recession, 131,000 jobs per month have been created. Including that rough first year, 35,000 jobs per month have been lost during the Obama Administration. But it doesn't seem fair to blame Obama for the collapsing economy he inherited.)
In a scenario we've seen before, an encouraging spurt of U.S. economic expansion has given way to what some see as a disappointing fizzle, marked by a sharp drop in the pace of job growth.
With yesterday's news that employment south of the border grew by only 115,000 in April, far below the anticipated 160,000, stock markets in the U.S. and Canada fell as investors feared that the U.S. is bogging down in another period of substandard growth.
WASHINGTON - Don't panic yet. The government reported Friday that the economy got off to a tepid start this year, but that doesn't foreshadow a repeat of the near-standstill that happened in 2011.
"The economy is firmly on a growth trajectory," said Sung Won Sohn, an economics professor at California State University's Smith School of Business. "The first-quarter slowdown will be temporary."
Still, the January-March report was discouraging.
Economists had expected gross domestic product — the broadest gauge of economic output — to expand at a 2.5 per cent annual rate for the first three months of the year. Instead, the Commerce Department said it was 2.2 per cent, mainly because of government budget-cutting and a slowdown in business investment.
WASHINGTON – U.S. employers cut back on hiring in April and more people gave up the hunt for work, dimming hopes the economy was turning a corner just as President Barack Obama prepared to launch his re-election campaign.
Employers added 115,000 workers last month after increasing payrolls 154,000 in March, the Labour Department said on Friday. Economists had expected to see the creation of 170,000 jobs.
They also note that housing is more affordable now than it has been at any time in the last four decades.