The consensus view is that the Bureau of Labor Statistics will announce that 200,000 jobs were generated in March. But among the experts that Bloomberg surveyed ahead of Friday's government jobs report, predictions range from 150,000 to 310,000. If it hits the high end of that range, it would mark the best private-sector gain since November 2005, continuing an upward trend over the past six months.
That would fit with other statistics regarding the job market, which struggled to gain traction through most of 2010, when only 77,000 new positions were generated each month, many of them temporary Census hires. For instance, the Conference Board reported Wednesday that online advertised job vacancies have risen 600,000 in the first three months of 2011:
“Thus far in 2011, labor demand is looking strong,” said June Shelp, Vice President at The Conference Board. “In the first quarter of 2011, the monthly increase in advertised vacancies has averaged about 200,000/month. That’s good news after the overall anemic growth in labor demand over the last 11 months of 2010. In March, almost half of the advertised vacancies were new ads that were not there the previous month (new ads up 98,200). This is a further positive sign that employers are continuing to look for workers.”
Moreover, state and local tax revenue rose 2.2 percent in the fourth quarter compared with the same period in 2009, according to the Census Bureau. While these revenues are still well below their pre-recession peak, their improvement is an indication that more people are employed and spending money, which generates more revenue from sales and other taxes.
So a big headline producer in the jobs report seems possible. But even if the BLS's seasonally adjusted survey clocks in with 300,000 new jobs for March, there's a very long haul ahead. Adjusting for population growth, just getting back to where we were in December 2007 means 10.5 million jobs need to created. To reduce the jobless rate to 6 percent, which would still be above the so-called full-employment level, requires that 360,000 new jobs be generated each month for the next 36 months, until March 2014. Against that metric, a jobs report which only comes in at the expert consensus level of 200,000 is essentially at the break-even point, enough to keep up with population growth but not much more.
Given the depths to which the recession took us, reducing unemployment in any significant way will require that gross domestic product rise more than the 3.1 percent it did in the fourth quarter of 2010. More along the lines of 5 percent. But nobody thinks that is going happen. Durable goods orders, for instance, have been down four of the past five months, and took a 0.9 drop in March against expectations of a 1.1 percent increase. Government layoffs, rising oil prices, the wretched housing market, the wreckage in Japan, continuing debt problems in Europe all serve to shackle a recovery.
As a consequence, financial experts have been downgrading their GDP estimates for the first quarter of 2011, which ends today. Macroeconomic Advisers decreased its estimate to 2.3% from 2.5%, Morgan Stanley to 2.5% from 2.7%, and Bank of America to 2.2% from 2.5%. Those anemic numbers, if they turn out to be accurate, mean millions of out-of-work Americans have a long way to go before they get a regular paycheck again.