Economic growth plunged in the first three months of the year, according to federal data released Wednesday. Could job-seekers be in for a double-dose of bad news when the government issues its April employment report on Friday?
The U.S. Commerce Department reported Wednesday that first-quarter Gross Domestic Product advanced at an annualized rate of only 0.1 percent, well below the roughly 1 percent growth economists had expected and the slowest pace of expansion since late 2012.
For now, economists are sticking to forecasts of healthy payroll gains in April, with a consensus estimate of 215,000 jobs. That would track with the roughly 200,000 jobs a month the economy was creating before severe winter weather chilled hiring in December and January.
Unemployment, now at 6.7 percent, is expected to tick down to 6.6 percent, with the warmer spring weather encouraging more Americans to look for work.
Signaling their own comfort with where the economy is headed, Federal Reserve officials continued this week to scale back a bond-purchase program aimed at boosting growth. The central bank's rate-setting panel said on Wednesday that labor market indicators since March "were mixed but on balance showed further improvement."
One sign the job market is holding up: Applications for unemployment benefits have fallen this month to their lowest reading since May 2007, suggesting that many formerly jobless people are finding work.
In a survey of private-sector job growth, payroll processing firm ADP said Wednesday that employers added 220,000 jobs last month.
That report is often at odds with the government's broader monthly labor readout. Yet the stronger hiring jibes with what appears to be a growing sense of confidence among corporate leaders, said Ken Esch, a partner with PwC. A recent survey by the management consulting firm of more than 230 CEOs found that 60 percent of corporate executives are optimistic about the U.S. economy, which could presage more robust hiring in the months ahead.
"Having the confidence of having it made it through the worst of the recession, there's been a change in focus, and that focus is now really on growth," Esch said, while noting that private-sector job growth is expected to trend steadily upward rather than surge.
Another factor that may have stoked hiring last month is the same one that chilled job-creation earlier in the year: the weather. Forecasting a 220,000 gain in jobs in April, analysts with French bank Societe Generale note that the mean temperature across the U.S. over the two weeks ended April 12 was 2 degrees warmer than normal.
"Our view is that the return of more normal weather and the expected re-acceleration of the U.S. economy should allow the labor market to routinely create 200,000 to 250,000 jobs per month and push the unemployment rate lower in the period ahead," said John Canally, economist and investment strategist with broker-dealer LPL Financial, in a research note.