The prevailing view among economists is that U.S. growth will accelerate over the next few months after a brief lull. That view will get tested this week with the April jobs report.
The monthly employment report due Friday headlines a busy week of economic data. Also on tap are reports on the U.S. manufacturing, construction and service sectors.
Clearly the first quarter was not a very good one, especially at this late stage of an economic recovery. Growth tapered off to 1.8% from 3.1% in the final three months of 2010. The weather was poor, defense spending fell, state governments pared back, soaring oil prices whacked consumers and the Japanese earthquake disrupted the flow of global supplies.
Yet economists believe that most factors contributing to the first-quarter slowdown are temporary. Oil prices are widely expected to taper off, for instance, and the effects from the Japanese disaster will recede.
Just as important, they say, are increasing signs that more companies are willing to hire. As more people join the labor force, it will lead to an increase in consumer spending that triggers further hiring.
Manufacturing has been the economy’s biggest star. Demand has soared, here and abroad, and companies have gone on a hiring binge to keep up. The sector has expanded 20 straight months, according to the Institute for Supply Management’s closely followed index.
Most economists predict the U.S. will add just slightly under 200,000 jobs in April. The U.S. gained an average of 200,000 jobs in February and March, the best two-month performance in about five years.
While that’s good enough to absorb natural growth in the labor force, it’s far too little to drive down the nation’s 8.8% unemployment rate. Monthly job gains would have to total 300,000 or more over a sustained period to accomplish that task.