April job growth to be affected by sequester
It’s a busy week of economic news releases, toplined by the Labor Department’s April employment report, due out on Friday.
March was an extremely disappointing month for jobs, with only 88,000 added, when the consensus forecast on Wall Street was 200,000.
Economists expect nonfarm payrolls to increase by 150,000 in April, an improvement from March, but still short of the average 212,000 increase over the three months ending in February.
According to BNP Paribas, the mediocre jobs number is due to “slower hiring in construction, manufacturing and mining, and a pickup in government layoffs.” Yes, the sequester is likely to have impacted payrolls, but whether that is a good thing depends on your ideology.
If you are left-leaning, you will of course rue the government layoffs since U.S. unemployment is still persistently high at 7.6%.
If you are right-leaning, however, you might think this is merely a much-needed rebalancing of the ratio of government workers to private sector workers, and that instituting pro-business policies to improve hiring in the more productive private sector is the way to sustainable jobs growth.
Another key event this week is the Federal Reserve’s monetary policy meeting that commences Tuesday and ends Wednesday.
In his bid to drive unemployment down, Fed chairman Ben Bernanke has long committed to a massive stimulus program to keep interest rates at historic lows.
Given that jobs remain a problem, Wall Street does not expect any significant change in policy to emerge from this week’s Fed meeting.