Construction sector rallied U.S. employment growth from a 17-month low in March, which could further alleviate worries of a sharp slowdown in economic growth in the first quarter.
Persistent effects of tighter financial market conditions and Worsening worker shortages at the turn of the year, but, suggest the job gains maybe stayed under last year’s brisk pace.
The US economy slowdown spur has mainly to do with $1.5 trillion tax cut package from the Trump administration that increased government spending fades. As well as a trade war between Beijing and Washington also slackening global growth have also taken a toll on the economy, which in July will celebrate 10 years of growth, the longest on record.
On Friday the Labor Department’s closely watched monthly employment report would follow closely after high construction sector spending and factory data that helped banks to increase their growth estimates for the first quarter.
According to Euler Hermes North America, chief economist Dan North, a number that is close to consensus and with an upward revision to February will give you some degree of relief that while the economy is slackening, it isn’t decreasing quickly.
The economy rose at a 2.2% rate in the fourth quarter, which is less from the July-September quarter’s quick 3.4% pace. While yearly growth estimates for the first quarter are between a 1.4% and 2.1%.
By strengthening pay growth and a low joblessness ratio, would decrease fears of a sudden financial slowdown. Estimated hourly earnings in March are likely to have boosted 0.3% after jumping 0.4% in February.
By doing this the annual increase in wages will be at 3.4%, which will be largest increase since April 2009. On the other hand solid pay growth could increase confidence that purchaser spending would support and move the economy, after consumption stopped in January.
The limited availability of workers is increasing wages. By the end of the year the unemployment rate is estimate unchanged at 3.8% in March, close to the 3.7% that Federal Reserve official’s project.
According to Economists, March solid employment report would suggest that financial market prospects that this year the Fed will cut interest rates were early. The rate cut expectations gained traction when the U.S. Treasury yield curve temporarily inverted in late March, brisk recession worries.