As we flip the calendar over to May this week, we'll get the monthly employment report from the government.
The previous snapshot from the Labor Department was a disappointment, showing lackluster job creation in March. We know that government spending has been slowing, as demonstrated in last week's report on first-quarter growth. The question is whether it is having a huge impact on private-sector job creation. Consumer spending rose during the first three months of the year, defying expectations. That could set us up for a better showing than we might have expected this year, but that requires consumers to continue to spend despite the double-whammy negatives of higher payroll taxes and government spending cuts.
Fewer layoffs, but where's the hiring?
The story of the job market as the economy recovered from the Great Recession has been one of lackluster hiring. And that is expected to be reflected once again in this Friday's report from the Labor Department.
Economist Scott Brown, with Raymond James & Associates, says the job market is "still kind of a mixed bag. We've been through this spring swoon for a couple of years." Brown says "spring is typically when firms do their hiring, so it is very important."
Jeffrey Rosen, chief economist for Briefing.com, says hiring continues to be the sticking point. Rosen says, "Businesses are seeing little reason to add to their workforce, given the recent softness in overall demand." He says "employment growth will exceed the lackluster March levels," but will probably fall well short of 200,000.
March was a downer
Economists tell us that some 125,000 jobs or so must be added every month just to keep up with growth in the population. The government said that employers added just 88,000 jobs to payrolls in March. The number jobless for 27 weeks or more stood at 4.6 million. Yes, the unemployment rate ticked down to 7.6 percent, but that was mostly because of the large number of Americans who gave up looking for work.
What else is on tap?
This week brings (all times eastern):
- The Conference Board's report on consumer confidence (10 a.m. Tuesday).
- The Institute for Supply Management's gauge of the manufacturing sector (10 a.m. Wednesday).
- The Federal Reserve Open Market Committee's statement on the economy (2 p.m. Wednesday).
Fed wants lower joblessness
The Federal Reserve is expected to keep interest rates at their current record-low levels and to continue $85 billion in monthly asset purchases. Among the central bank's main goals is bringing down the unemployment rate, targeting a level of 6.5 percent.
There's been speculation the Fed could begin to wind down the asset purchases by the end of the year. Fed officials have said they expect to hold onto these assets for some time, even after they slow the purchases. Brown says of the 6.5 percent unemployment level, "We're still a ways away. We may get there in the early part of next year. It depends on how you get there. If people are leaving the labor force, it is not a good thing." The Fed will be watching that, too.
Auto sales are buzzing
The automobile manufacturers release their April sales numbers Wednesday at various times. Auto information provider Edmunds.com says this month's sales should be the best April showing since 2007. Nissan is expected to show the largest year-over-year sales increase among the major automakers, rising a strong 30 percent.
This week in business history
Taken a ride on a jetliner lately? A half-century or so ago, jet travel was a novel concept. On May 2, 1952, the de Havilland DH-106 Comet was introduced to become the first mass-produced commercial jetliner. It was put into service by the now-defunct airline British Overseas Airways Corp., or BOAC, (referenced by the Beatles in "Back in the U.S.S.R.," complete with jet engine sound). The particular aircraft itself was found to have design problems, but over the successive decades, jet travel would become the mode of choice for long distances.
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