March 31, 2011
Recent private sector reports show what we have all been waiting for--sure signs that the job market is strengthening.
According to USA Today, the ADP National Employment Report, which is closely watched as a precursor to the Labor Department's jobs report due out Friday, said the private sector added 201,000 jobs in March. Moreover, in the last four months, an average of 211,000 jobs a month has been added; a significant increase from the 74,000 added from August to September.
The ADP report showed "broad gains" across all sectors and noted that companies of all sizes added jobs in March, according to CNN Money. USA Today noted that small companies led the pack in hiring, adding 102,000 jobs in March. Mid-size companies added 82,000 jobs and large companies increased payrolls by 17,000.
Many economists said the data is very promising and predict that a monthly average of 200,000 new jobs will be added this year.
"It seems clear to me hiring is picking up, and we're going to add more jobs in 2011," said Wells Fargo economist Mark Vitner.
ADP spokesperson and chairman of Macroeconomic Advisers Joel Prakken said he expects the unemployment rate to drop to near 8.25 percent by the end of the year. The current unemployment rate stands at 8.9 percent.
According to the Naperville Sun, two other reports released on Wednesday also had encouraging news. A survey of chief executive officers by the Business Roundtable found that 52 percent of top CEOs--the highest percentage in the survey's nine-year history--planned to boost hiring in the next six months. Meanwhile, outplacement consulting firm Challenger, Gray & Christmas reported that job cuts dropped to 41,528, down 18 percent from February. That is a decrease of 39 percent from a year earlier.
While the increase in private sector hiring is definitely positive, economists still caution that there is a long way to go before full recovery. CNN Money reported that the public sector is still losing jobs--19,099 government jobs were eliminated in March, which is 46 percent of all jobs lost.
"It is difficult to be optimistic about the outlook for government workers," said Rick Cobb, executive vice president of Challenger, Gray & Christmas, in a statement. "Most cities and states have only just begun to address their massive budget deficits, and we have yet to see how budget cutbacks are going to impact workers at the federal level."
Furthermore, noted USA Today, some economists speculate that the $4-a-gallon gas prices will slow down consumer spending, which could abate hiring.
Compiled by Heidi M. Agustin
"Jobs picture shows some positive signs," CNNMoney.com, March 30, 2011, Charles Riley and Ben Rooney
"New data show strengthening job market," USAToday.com, March 30, 2011, Paul Davidson
"Private-sector job report shows steadier hiring," napervillesun.suntimes.com, March 31, 2011, Francine Knowles