Jobless Report May Confirm Economy Is Heating Up
RENEE MONTAGNE, HOST:
The economy nearly stalled out here in the U.S. in the beginning of the year, according to the government. That slowdown was blamed largely on winter storms that clobbered much of the country last winter. Recent data suggests the economy has warmed up. There's hope that will be confirmed this morning when the monthly job numbers for April are released. NPR's John Ydstie reports.
JOHN YDSTIE, BYLINE: Ian Shepherdson of Pantheon Macroeconomics has expectations for the April employment numbers, right in line with what lots of economists are projecting.
IAN SHEPHERDSON: I'm pretty hopeful that when we get the payroll figures for April that we will be back to where we were before the weather started to effect the numbers and maybe even a bit better.
YDSTIE: That would put job growth back above the 200,000 a month level. That's right where a survey done by the private payroll processing company, ADP, came in. Earlier this week, it reported that businesses added 220,000 jobs last month. A survey of economists by Dow Jones produced a number in the same ballpark with an expectation that it would move the unemployment rate down a tick to 6.6 percent.
And after its meeting this week, Fed policymakers released a statement saying they believe economic activity has picked up and the labor market will continue to improve gradually. But Paul Edelstein of IHS Economics says the housing sector is one potential hurdle for stronger employment growth that won't be solved simply by better weather.
PAUL EDELSTEIN: The housing market has a lot of other problems. Affordability isn't as good as it was a couple of years ago 'cause prices are up and mortgage rates are up. Construction costs are up as well and that's hurting builder margins. And, of course, credit is still tight, not just for buyers, but for land developers.
YDSTIE: Carl Tannenbaum, chief economist at Northern Trust in Chicago, says there are other things he'll be focusing on in today's jobs report beyond the top-line job creation and unemployment rate numbers.
CARL TANNENBAUM: Our prospect's improving enough so that people who have been laying low and maybe not actively looking for work will come back in and become more active. What is the fraction of part-time hiring, which remains at a record fraction of overall hiring? Will more people find full-time work as opposed to part-time?
YDSTIE: In recent surveys, the number of part-time workers who want full-time employment has been abnormally high. The other area Tannenbaum says he'll look for is the level of long term unemployment.
TANNENBAUM: There are an unusually high number of people who have been out of work for 26 weeks or longer. We always want to see that working its way down.
YDSTIE: The longer people stay unemployed, the more difficult it is for them to find jobs, both because their skills atrophy and employers view them with suspicion. These underlying issues are just the ones the Federal Reserve has decided it should be focusing on as it decides how much support it should be providing for the economy. John Ydstie, NPR News, Washington.