Washington - US hiring likely increased at its quickest pace in five months in April, which would bolster hopes of a strong rebound in economic activity in the second quarter.
Employers probably added 210,000 jobs last month after increasing headcount by 192,000 in March, according to a Reuters poll. That would also top the pace of payrolls gains in the first quarter of 177,667 jobs per month.
The unemployment rate is forecast falling one-tenth of a percentage point to 6.6 percent in April, matching a five-year low previously touched in January.
“It will confirm that the economy is gearing up to a higher rate of growth. It would not be an isolated number, the vast majority of economic reports for the last several weeks point to an upward shift in growth,” said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.
The economy stalled in the first quarter, weighed down by an unusually cold and disruptive winter. A slow pace of stock accumulation by businesses, while they work through a glut of goods amassed in the second half of 2013, also undercut growth.
But upbeat data such as consumer spending and industrial production suggest the first quarter's 0.1 percent annual pace was an aberration and is not a reflection of the economy's otherwise sound fundamentals.
The Federal Reserve on Wednesday shrugged off the dismal performance. The US central bank, which announced further reductions to the amount of money it is pumping into the economy through monthly bond purchases, said indications were that “growth in economic activity has picked up recently.”
Economists expect second-quarter growth to top a 3 percent pace. The Labor Department will release its monthly jobs report, which is closely watched by financial markets around the globe, on Friday at 8:30 a.m. (1230 GMT)
HOUSEHOLD SURVEY A WILD CARD
While details of the bigger survey of employers are likely to be upbeat, the smaller and volatile household survey from which the unemployment rate is calculated is a wild card.
Household employment grew robustly in the first quarter and economists expect some moderation in April. The labor force, which also grew during the same period, could decline a bit.
The labor force participation rate, or the share of working-age Americans who are employed and unemployed but looking for a job, has been rising. This comes as improving job prospects encouraged some job seekers who had given up the hunt to resume looking for work.
Economists expect some of the 1.35 million people who lost their longer-term unemployment benefits at the end of last December to drop out of the labor force at some point.
“There's still a risk that the participation rate could be pushed down by some portion of the people who lost benefits at the beginning of the year dropping out of the labor force,” said Ted Wieseman an economist at Morgan Stanley in New York.
The participation rate, which remains near its lowest levels since the late 1970s, and the persistently high number of Americans out of work for long spells could keep the Fed from lifting interest rates for some time to come.
All the anticipated payrolls gains in April are expected to come from the private sector, which in March had regained all the jobs lost during the 2007-09 recession.
Overall employment remains 422,000 jobs shy of its peak level in December 2007, a deficit that could be cut in half if Friday's figure comes in on target.
Outside of government payrolls, which are forecast to have been flat for a second straight month, job gains in April are likely to have been as broad-based as they were in March.
Manufacturing employment likely rebounded after dipping in March. Another month of solid gains in construction payrolls is expected, but the hiring trend could slow in the months ahead as residential construction loses some steam.
Average hourly earnings probably rose 0.2 percent in April after being flat the prior month. The length of the workweek likely held steady at 34.5 hours in April after bouncing back in March from its winter-depressed levels.