The Canadian Press - ONLINE EDITION

US economy's spring thaw could boost April hiring as consumer spending powers growth

  • Print

WASHINGTON - Signs that the U.S. economy is emerging from a deep winter freeze have raised hopes that hiring accelerated in April.

Economists are mostly bullish. They forecast that the economy gained 210,000 jobs in April, according to a survey by FactSet, and that the unemployment rate dipped to 6.6 per cent from 6.7 per cent.

The government will release the April employment report at 8:30 a.m. Eastern time Friday.

If economists' forecasts are accurate, April will have produced the largest burst of hiring since November. That would show that the economy is producing consistently solid job growth. Job gains totalled 197,000 in February and 192,000 in March.

The steady pace of hiring has encouraged more Americans to start looking for work. That's a hopeful sign that they think their prospects for finding a job have improved. In the first three months of this year, about 1.3 million people began looking for jobs, and most have found them.

Last year, by contrast, the number of people either working or looking for work shrank by roughly 500,000.

Most of the job gains in March were in low-paying industries, a pattern than has been consistent for most of the nearly 5-year old recovery. Temporary help agencies, for example, added 28,500 jobs, hotels and restaurants 33,100 and retailers 21,300.

Recent economic reports have pointed to faster economic growth after a dismal start to the year, slowed by a brutal winter.

Consumers are ramping up spending, businesses are ordering more goods and manufacturers are expanding. The strengthening numbers show that harsh snowstorms and frigid cold in January and February were largely to blame for the economy's scant growth at the start of the year.

The economy barely expanded from January through March, eking out an annual growth rate of just 0.1 per cent, down from a 2.6 per cent rate in the final three months of 2013. Americans spent more last quarter on utilities and health care, but their spending on goods barely rose. Businesses also reduced spending, and exports fell.

One drag on the economy appears to be the faltering housing recovery. Home building and renovation declined in the January-March quarter, slowing growth for a second straight quarter.

Builders started work on fewer homes in March than they did a year earlier. Sales and construction may rebound later this year, but economists don't expect housing to contribute much if at all to growth.

Still, other data indicate that the economy was already rebounding in March and probably improved further in April. Auto sales jumped 8.5 per cent in April compared with the same month a year ago, the best April sales increase in nine years.

Consumers spent more at furniture stores and other retail chains. Overall consumer spending soared 0.9 per cent in March, the government said Thursday, the most in 4 1/2 years.

Economists watch consumer spending closely because it makes up about 70 per cent of economic activity.

Spending is up partly because Americans earned a bit more, and confidence has improved from the bleak winter months. Incomes rose 0.5 per cent in March, the government said, the most since August.

Consumer confidence has nearly returned to pre-recession levels, according to two surveys by the Conference Board and the University of Michigan.

Also Thursday, a private survey showed that manufacturing activity accelerated in April for a third straight month. Measures of export orders and hiring rose, and new orders increased at a healthy pace.

Businesses are also investing more in machinery and equipment after cutting back in those areas in January and December. Business orders for manufactured goods jumped in March, the government said last week.

All told, the positive news has led most economists to forecast a strong rebound in economic growth — to a 3.5 per cent annual rate in the current April-June quarter. And growth should reach nearly 3 per cent for the full year, up from 1.9 per cent in 2013, they expect.

Even the slumping housing market has reported some good news this week. Signed contracts to buy existing homes rose in March for the first time in nine months. That holds out the hope of higher sales in the months ahead.

And construction spending ticked up in March, fueled partly by more home and apartment-building.

___

Follow Chris Rugaber at http://Twitter.com/ChrisRugaber

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Glenn January won't blame offensive line for first loss

View more like this

Photo Store Gallery

  • A  young goose stuffed with bread from  St Vital park passers-by takes a nap in the shade Thursday near lunch  –see Bryksa’s 30 day goose challenge Day 29-June 28, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Jia Ping Lu practices tai chi in Assiniboine Park at the duck pond Thursday morning under the eye of a Canada goose  - See Bryksa 30 Day goose challenge Day 13- May 17, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Should Winnipeg control growth to deal with climate change?

View Results

View Related Story

Ads by Google