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Jobs data eyed as

questions on U.S.

economy linger

WASHINGTON: The government's report next week on April employment will add another piece to the puzzle for experts struggling to work out how fast the U.S. economy is really growing.

Monthly job gains in the first quarter of this year averaged 206,000. That was heftier growth than the 144,000 average for 1995 and suggested far more sizzle in the economy than most forecasters had been expecting.

The job numbers have roiled financial markets and they have been hard to interpret due to special factors like severe winter weather and the General Motors Corp strike in March.

Most economists are eager for a cleaner set of numbers in the April employment report, which is due next Friday.

"It will certainly be cleaner than January and February, when we had the effects of the blizzard," said economist Lois Plunkert at the Labor Department's Bureau of Labor Statistics.

"In March, we didn't know what to expect because we didn't know what the effects of the GM strike would be," Plunkert said.

Forecasts for employment growth in April hover around 130,000. Payrolls rose by 140,000 in March.

"I don't think we're going to see the same kind of job growth that we saw in the first quarter," said Christopher Low, economist at HSBC Markets Inc, who forecast a gain in April employment of 100,000.

Low sees job creation cooling down as the pace of hiring levels off in sectors such as construction and retail, which were big drivers in the job gains earlier this year.

Monthly jobs growth on the order of 130,000 is viewed as a healthy level at this stage in the economy's five-year expansion. Job creation at this level would neither signal an overheating economy nor one that would slip into recession.

But the robust 206,000 average for the first quarter has raised some concerns at the Federal Reserve and elsewhere.

"If you were to get a continuation of that, that might create problems," Alfred Broaddus, president of the Federal Reserve Bank of Richmond, said earlier this week.

Above-trend jobs growth could pose a dilemma for the Fed's efforts to keep inflation in check as it can lead to labor market shortages and raise the risk of wage inflation.

Plunkert said the return of workers idled by the GM strike should swell overall payrolls for April by about 33,000 -- the same amount that was subtracted from the March payrolls number.

By the time it ended, the 17-day strike at two GM Ohio brake plants had brought most of the automaker's operations to a halt but because of the timing of the March payrolls survey, the impact was limited to around 33,000 jobs, according to Labor Department estimates.

Another Bureau of Labor Statistics economist, Ron Hetrick, said the four-week interval between the March and April survey periods could depress the April figure somewhat as it follows a five-week interval in the same month last year and the year before.-Reuter