Skip to main content

The Globe and Mail

U.S. report to show strong job creation in private sector, economists say

A "Help Wanted" sign in the window advertises a job opening at a dry cleaners in Boston, Massachusetts in this file image from September 1, 2010.

BRIAN SNYDER/REUTERS

Economists expect to see another solid U.S. jobs report Friday, but there's a long way to go before unemployment drops to a more comfortable level for the Federal Reserve.

The Labor Department report is expected to show between about 170,000 and 250,000 jobs were created in the United States in March, compared to February's 236,600.

"We expect a 220,000 increase, somewhat less than in February (236,000) though marking the fourth month of the past five above 200,000 – that's roughly the dividing line between moderate and healthy growth," said senior economist Sal Guatieri of BMO Nesbitt Burns.

Story continues below advertisement

The employment report is among the most important of U.S. indicators at this point, not least because the U.S. central bank's policy-setting panel, the Federal Open Market Committee, has said it won't raise interest rates until the jobless rate eases to 6.5 per cent.

It stood in February at 7.7 per cent – its lowest in five years, but still high – and it's believed to have remained there last month.

"Besides the jobless rate, the Fed will have a keen eye on the employment-to-population ratio," Mr. Guatieri said.

"It likely needs to bounce from three-decade lows before the FOMC sees substantial improvement in the labour market outlook and begins tapering QE3," he added, referring to the central bank's third round of quantitative easing.

Also to be carefully watched on Friday: the contrast between the private sector and the public sector. The latter has been hit by cutbacks.

Toronto-Dominion Bank economists, who believe 195,000 jobs were created in March, expect the report to show the private sector created 205,000 jobs, while the public sector slashed 10,000.

"In the coming months, we expect the labour market momentum to slow modestly, reflecting the overall slowdown in economic growth performance," TD said, suggesting it will be some time yet before unemployment falls to the Fed's 6.5-per-cent mark.

Story continues below advertisement

Andrew Grantham, of CIBC World Markets, expects to see job gains in the retail and construction industries.

"Retailers, surprised by the resilience of consumer spending so far, may have upped hiring, while the recovery in housing should continue to benefit employment in the construction sector," he said.

Report an error Licensing Options
About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.