300,000 Jobs in March?
The handicapping of the March payroll report has already begun and expectations are rising:
March 10 (Bloomberg) — The U.S. may add as many as 300,000 jobs in March, the most in four years, setting the stage for what some economists say will be sustained employment gains.
Better weather, hiring of temporary government workers and a growing economy may bring the biggest job increases since March 2006, said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The rise would be the second since President Barack Obama took office in January 2009.
February payrolls dropped by 36,000, the Labor Department reported last week, depressed in part by East Coast snowstorms that closed many businesses. Excluding the effects of the weather and the hiring of government workers to conduct the 2010 Census, payrolls would have climbed by about 100,000, Greenlaw said yesterday in a Bloomberg Radio interview.
“If you get a plus 100,000 number again in March, then you’d be talking about a headline reading of a little bit better than 300,000 when you factor in the weather bounce-back and the census effect,” he said.
Later in the article Bruce Kasman at JP Morgan is quoted as expecting 200 -300k and Jon Hatzius at Goldman recently raised his estimate to 275k. Joe LaVorgna of Deutsche Bank is expecting to average 300,000 for the next few months:
“We have overcut inventories, we have overcut capital spending and we have overcut jobs,” said LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. A March payroll gain of as much as 450,000 “can’t be ruled out,” he said, and further increases are “going to convince people of the sustainability and durability of the recovery.”
Regular readers know that I’ve been among the more bullish since the low last March. I never thought the economy was that bad to begin with and if Paulson, Bernanke and especially Bush hadn’t panicked, I don’t think we would have ever seen the type of job destruction we did. Of course that can’t be proved but I think if we start getting some rapid job growth soon, that view will be at least partially vindicated. Productivity has soared throughout the recession, something which isn’t normal for a recession, demand has been amazingly resilient given the circumstances and now we’re starting to see investment come back. The only piece left is for hiring to pick up and like these economists I think we’re on the verge of that as well.
Having said all that, if the market continues to rally into the March payroll report, we could be setting up for a major disappointment if the numbers aren’t big. In fact with expectations this high so far from the report, expectations will probably continue to rise and a disappointment then becomes more likely. Of course that assumes the market continues to rally into the report. I am bullish on the market and the economy so that is what I expect but I have to say, I don’t much like all these people agreeing with me.
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- March 10th
