Wall Street ratcheting down jobs expectations: JPMorgan economist

Thu Apr 4, 2013 5:58pm EDT
 
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By Steven Norton

NEW YORK (Reuters) - Wall Street has lowered expectations for the pace of employment growth following higher than forecast jobless claims last week, but the latest jobs data due Friday won't tell investors much about the economy's momentum, JPMorgan Chase (JPM.N: Quote) senior economist James Glassman said on Thursday.

Economists polled by Reuters expect employers added 200,000 jobs last month after hiring 236,000 workers in February. The unemployment rate is seen steady at 7.7 percent.

The Labor Department is set to release the data at 8:30 a.m. EDT (1230 GMT) on Friday.

"The Street already has ratcheted down its expectations for tomorrow after the ADP number, so we'd be surprised by anything over 160,000," Glassman told the Reuters Global Markets Forum. "I've been thinking 175,000 to 200,000, counting on a gradual acceleration in construction employment, but ADP took a little steam out of that story."

The ADP National Employment Report said on Wednesday that private employers added 158,000 jobs last month, falling short of economists' expectations for 200,000 new jobs. The hiring was below the lowest estimates in a poll by Reuters and was the smallest gain since October.

Initial claims for state unemployment benefits increased 28,000 last week to a seasonally adjusted 385,000, the highest level since November, the Labor Department said on Thursday.

While job growth may have eased in March, it isn't likely to change the U.S. Federal Reserve's view on whether or not it will continue its plan to stimulate the economy, Glassman said.

Instead, the central bank will be looking forward to the economic effects of $85 billion in government spending cuts and a hike in U.S. payroll taxes that took effect last month.   Continued...

 
Job seekers stand in line to meet with prospective employers at a career fair in New York City, October 24, 2012. REUTERS/Mike Segar