The Labor Department’s April jobs report will be released Friday, and should provide an important data point about the health of the U.S. economy. Economists, investors, policy-makers, politicians and the general public will be watching closely to see how many jobs the U.S. economy added last month, and whether the unemployment rate stayed level or changed. Economic indicators leading up to the report offered a decidedly mixed outlook.
“I’ve never seen a more mixed-up bunch of employment indicators,” economic analyst Ed Yardeni wrote in a note to clients Thursday. “The ones for April are all over the map.” He added: “I’m not sure that Friday’s employment report will fix the employment compass, which is pointing both north and south.”
The consensus expectation is 163,000 jobs to be added, according to Marketwatch, with some hopeful economists looking for 170,000 or more. On the lower end, Michael Gapen, an economist at Barclay’s Research, told clients he expects to find 150,000 jobs were added last month.
In an ominous sign, payroll services firm ADP said that private companies added 119,000 jobs in April, well below the 201,000 jobs that were added in March. The ADP figures frequently diverge from the official numbers, but the lackluster number doesn’t inspire confidence for Friday’s report.
On the positive side, the number of people seeking unemployment benefits fell by 27,000 — the most in over three months — to a seasonally-adjusted 365,000, according to the government. That suggests a pickup in hiring. Another encouraging sign came when an Associated Press survey of 32 leading economists predicted that that the pace of hiring will remain below the strong showings of earlier this year, but should be enough to reduce the unemployment rate 7.9% in time for November’s presidential election.
But in a striking finding, the AP said that the economists it polled believe it will be “at least three more years before unemployment falls below 6%, which would be a sign of a healthy economy.”
Friday’s report comes after a series of downbeat indicators. The economy added only 120,000 jobs in March, compared to the 205,000 that many analysts had been expecting, in a sign that the 2012’s earlier employment momentum could be losing steam. The unemployment rate fell to a three-year low of 8.2%, but that was due in part to a reduction in the number of Americans seeking work.
Meanwhile, the nation’s gross domestic product (GDP) — the most basic measure of national economic performance — grew at a lackluster rate of 2.2% in the first three months of the year, down from last quarter’s 3% rate, and below most economic forecasts of 2.5%. That’s particularly concerning because on average the economy needs to grow by 4% to reduce unemployment by one percentage point. Over 12 million people are out of work — including 5.3 million who have been jobless for over six months — and millions more have have grown frustrated and stopped looking for jobs.