Server Adrian Almanza brings appetizers to a table at the Satay Thai Bistro and Bar in Las Vegas, Nevada, March 28, 2021.
Bridget Bennett | Reuters
Employment growth could exceed 1 million in April, although many positions may also be vacant.
Economists expect more than 1 million jobs each in the next few months as more Americans get vaccinated and the economy booms. According to the Dow Jones, economists expect 1 million jobs to be created in April and the unemployment rate to have fallen from 6% in March to 5.8%.
“We’re going to get a good number, which is great. It’s just so nice to see numbers that are encouraging compared to the numbers we had a year ago,” said Diane Swonk, chief economist at Grant Thornton.
April is the first month of the second quarter, which is expected to be the peak of growth. The gross domestic product is expected to grow by 10% or more.
“Mass vaccination and the relaxation of business restrictions have likely fueled rapid job growth in virus-sensitive industries, including leisure and hospitality, retail and education (public and private),” said Goldman Sachs economists. They expect employment to grow by 1.3 million.
April’s employment report is also widely watched in the markets as the Fed pledged to maintain its zero interest rate policy and other easing measures until it believes the job market is healed and inflation picks up. However, amid mounting concerns about rising inflation, some investors believe that a very strong labor market could be a catalyst for the Fed.
“Just from a markets perspective, I think it would be bad for the markets if we saw a line of 1 million jobs,” said Luke Tilley, chief economist at Wilmington Trust. “If you keep understanding that, it will get us a lot sooner if the Fed hits its work target. That would scare the markets.”
If the central bank steps offside, it is expected to roll back its $ 120 billion monthly bond purchase program for the first time. Fed chairman Jerome Powell said the central bank was unwilling to discuss changing that program, although some Fed observers expect bonds to taper later this year or early next year.
Changes to bond purchases would be a precursor to an actual rate hike.
Economic boom
Shoppers wearing protective masks carry bags on Market Street in San Francisco, California on Wednesday, April 14, 2021.
David Paul Morris | Bloomberg | Getty Images
Consumers help fuel economic recovery as restaurants continue to expand and retailers see more foot traffic in stores.
However, economists hope for broad employment growth, including in construction and professional services.
Swonk said a big boost for the job market is coming from pent-up consumer demand, especially from those who have received stimulus checks. “You spend with devotion,” she said.
Tilley said job growth should be strong but expectations might be too high. He said the 916,000 employees in March could have been artificially empowered by the negative impact of the cold weather on jobs in February.
In addition, restaurant jobs may not grow as fast as expected because restaurant reservations are no longer growing at the same pace.
“You couldn’t get that much pop from this type of job,” said Tilley. “There’s a resounding refrain from the business world that they have a hard time finding people to fill jobs.” He said additional federal unemployment benefits could be a factor preventing some workers from returning until September when benefits run out.
Swonk said many people are barred from returning to work because their children are still going to school at home. Others are still waiting for their first or second dose of vaccine.
Tilley said he is watching the kind of jobs that are being added as there is a large skill mismatch in the economy and some companies are not requiring as many workers due to productivity gains.
“Inflation-adjusted retail sales rose 12.5% in the first quarter of this year. The number of people employed in retail was down 2.5%,” he said.
There could be a fuller picture of employment by September, when more people are ready to work and employers have hired more people, Tilley added.
He pointed to changes in the leisure industry that survived the pandemic. In restaurants, orders are being taken via iPads and more meals are being taken out.
“Yes, people will be more willing to work at that time. In terms of the jobs they once had, they won’t be as necessary,” he said.
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