April Jobs Forecast? Brighter Horizon But Still Some Clouds

WASHINGTON, May 6, 2010 -- The first Friday of every month turns the nation's attention to its battered labor market, but as the April jobs report gets released this Friday morning, the forecast is considerably brighter than at any time in the last two years.

For the first time since the recession began in 2009, the nation is expected to see job growth for two straight months. The consensus prediction is that employers will have added around 190,000 jobs to their payrolls last month. Just that prediction alone is welcome news for a country that lost 8.2 million jobs since January 2008.

But it is also welcome news for the White House and Democrats in Congress hoping to hang onto their own jobs with elections coming up this fall.

Obama was scheduled to speak about the economy this week in New Jersey, but the White House cancelled the event. The only explanation given by spokesman Robert Gibbs was that the president could not do both the Sunday trip to the Gulf Coast region to survey the oil damage and response, and travel to New Jersey.

Last month, he hit the road on the day the jobs report was released, discussing the economy with workers at a battery manufacturing facility in North Carolina, a state hit hard by job losses.

The White House continues to take a slow-and-steady approach to job growth -- touting the modest improvements but also stressing that there is a long way to go before there is reason for celebration.

One need look back no further than the month before the Obama administration took office to see signs of progress.

On Friday Dec. 5, 2008, White House economic adviser Christina Romer was pulled out of a meeting to brief then-President-elect Obama on the half million jobs lost in November.

"I am so sorry," Romer told Obama. "The numbers are just horrible."

Replied Obama, "It's not your fault -- yet."

Today, the jobs picture is far better, but at the same time still dire for millions of Americans. While 162,000 jobs were added to payrolls in March, the nation's unemployment rate is 9.7 percent.

Other Forecasts Call for Even Greater Job Growth

But there are encouraging indications that April's report will show more improvements in the labor market.

In the first three months of this year, the nation's economy grew at an annual rate of 3.2 percent, the third straight month of growth. Consumer spending, which accounts for about 70 percent of economic growth, increased by 3.6 percent in the first quarter, the biggest boost in three years.

"Given the other data," Romer said in a speech in Cleveland on Monday, "we are hopeful that Friday's April employment report will yield another positive reading."

While Romer acknowledged that "the economy still has a very long way to go," she said, "We are unquestionably on the right trajectory."

Vice President Joe Biden has voiced even greater optimism, confidently predicting at an April 23 fundraiser in Pittsburgh that the jobs report will show around 100,000 to 200,000 jobs added to payrolls.

That forecast is in line with the predictions of analysts such as Mark Zandi, chief economist at Moody's.com. The government's once-a-decade census, he said, will provide a massive boost to the jobs report.

"Given what the census did 10 years ago, we should get at least 100,000 additional census jobs in April and at least 300,000 census jobs in May," Zandi said. "Of course, those temporary jobs go away, so there will be a very significant drag on employment in the summer. June, July, August, September will see much weaker job numbers."

Moody's has predicted that the April jobs report will show growth of around 150,000 new jobs, with 100,000 coming from the census and the remaining 50,000 from the private sector.

Other forecasts call for even greater job growth, with some estimates putting the number far north of 200,000.

Democrats on Capitol Hill sure hope so.

Republicans, seeking to win back control of Congress this fall have been relentless in arguing that job growth has not returned fast enough or strong enough for millions of Americans.

"The administration predicted that if Congress enacted the stimulus plan, the unemployment rate would not exceed 8.0 percent," said Kevin Brady, the ranking Republican on the Joint Economic Committee, at a hearing this week. "The unemployment rate increased to 10.1 in October 2009, and remained at 9.7 percent in March 2010."

Brady cited a litany of the administration's policies, such as the health care reform bill, cap-and-trade legislation, and the expiration of the Bush tax cuts at the end of this year, as moves that are hurting the American labor market.

"The economic policies of President Obama and congressional Democrats, however well-intentioned they may be, are a hindrance to a robust job creation. If Americans wish to enjoy vigorous job growth, these economic policies must be reversed," Brady said.

Even White House economic adviser Paul Volcker acknowledged this week the unemployment picture is far from pretty.

"I am afraid the level of unemployment will be too high for too long," the former Federal Reserve chairman said in the prepared text for a speech in St. Louis on Monday. "My characterization of the outlook is a long slog."

Whether the forecasts of Volcker, Romer, Brady or Zandi prove correct remains to be seen. But it is safe to say that if Biden's predictions come true, many job-seeking Americans will be more confident about finding work again than they have been in a long, long time.

"Some time in the next couple of months, we're going to be creating between 250,000 jobs a month and 500,000 jobs a month," Biden said in April.

"We caught a lot of bad breaks on the way down," he said. "We're going to catch a few good breaks because of good planning on the way up."