Jobs boost to Obama as recovery picks up pace

Click to follow
The Independent Online

Stock market investors expect it will be a Good Friday for news on the jobs front when a pivotal US unemployment report is released at the end of this week, despite the trading holiday.

The world's largest economy is believed to have added about 213,000 jobs in March, the fourth month in a row that employment gains have totalled more than 200,000. The unemployment rate is expected to hold steady at a three-year low of 8.3 per cent.

The US equity market has surged more than 6 per cent since the start of the year on signs that: the labour market is picking up; the economic recovery is no longer sofragile; and US consumers could soon emerge from their four-year funk. Consumer spending accounts for 70 per cent of US GDP.

However, Paul Dales, senior US economist at Capital Economics, cautioned: "At some point, the recent employment gains will translate into faster income growth, but households will presumably use this to replenish their savings before boosting consumption growth."

Despite the strengthening labour market, the consensus among the economists' forecasts is that no change is expected for average hourly earnings or hours worked during March.