May 19, 2024

Economix: 5 Questions About Friday’s Jobs Report

A job fair this week in Phoenix for positions at a grocery chain.Ross D. Franklin/Associated PressA job fair this week in Phoenix for positions at a grocery chain.

Below, we pose five questions to ask about Friday’s jobs report, much as we did a month ago. The big picture is that job growth has been picking up in recent months — but the job market is still a long way from being healthy, and the last month or so has offered new reason for concern.

The Labor Department will release the report at 8:30 a.m. Eastern time.

Our five questions:

1. Has the recent economic slowdown led to a slowdown in job growth?

The first quarter of this year had the strongest job growth since before the recession began, in late 2007. But that job growth came on the heels of accelerating economic growth in late 2010. The economy has slowed markedly in early 2011.

Ben S. Bernanke, the Federal Reserve chairman, and many private forecasters say they think the economic slowdown was mostly a blip. Do employers agree? Or have they cut back on hiring and potentially increased layoffs?

As a point of reference, the most recent Labor Department numbers show that economy added 216,000 jobs in March and an average of 159,000 over the past three months.

2. Has the crisis in Japan affected employment in this country?

This will be the first jobs report that will include the effects of the Japanese tsunami (because the survey period is the week that includes the 12th day of the previous month, and the tsunami occurred on March 11). One place to look for effects: the automobile industry, which has been hurt by a shortage of parts from Japanese factories.

Employment in the manufacturing subcategory known as Motor Vehicles and Parts has been growing recently, by an average of almost 4,000 jobs a month over the last six months, to 697,000. What happened in April?

3. Are the cutbacks by local and state governments becoming more severe — or perhaps less so?

They are major employers, with 19.3 million workers. But facing deficits, they have been laying off workers and hampering the recovery. Over the last year, they have cut an average of 24,000 workers a month (and at a fairly steadily pace over the year).

4. What does the length of the work week say about business executives’ state of mind?

Companies often increase existing workers’ hours shortly before they start hiring large numbers of new workers. That hasn’t happened much this year. The average work week in the private sector was 34.3 hours in March, up from 34.2 hours late last year.

An increase would be a sign that employers — like stock-market investors — do not seem scared by the recent slowdown in economic growth. A lengthening work week would also help increase workers’ paychecks at a time when hourly wage growth has been weak.

5. Do the statistical details in the report offer reason for optimism?

The Labor Department won’t be releasing only numbers for April on Friday. It will also be revising its estimates of job growth in February and March. Current estimates show employment gains of 194,000 for February and 216,000 for March. An increase in those numbers would suggest that the government’s surveys of employers are having a hard time keeping pace with new hiring — a common occurrence during a recovery.

Likewise, the government’s survey of households will also be worth watching. In recoveries, it often shows bigger job gains than the survey of employers. And it usually ends up being more accurate, partly because the employer survey misses the jobs created by start-up firms. From January to March, the household survey showed an average employment gain of 219,000 jobs, compared with 159,000 for the employer survey.

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