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WSJ: March Payrolls Growth Soars Above Economists’ Forecasts
Posted By Barry Ritholtz On April 3, 2004 @ 7:45 am In Finance,Media | Comments Disabled
The WSJ does its monthly round up of Economists (before you take any of this as Gospel, remember this crew has been very wrong for about 6 months now):
After months of dismal payroll gains that missed economists’ forecasts by wide margins, the 308,000 jobs added in March (See article) soared past expectations. So, does this mean we can drop the “jobless” from “jobless recovery?” Here’s what some economists and analysts had to say about the report:
“This is the linchpin we’ve been waiting for to justify this economic recovery. … [O]ne month doesn’t make a trend and there’s a lot of volatility in these numbers. … But our expectations have all of a sudden ballooned.”
– Art Hogan, chief market strategist, Jefferies & Co.
* * *
“We think core inflation has stabilized and is edging higher and we see this report as the beginning of robust job creation.”
– John Ryding, chief market economist, Bear Stearns
* * *
The March payroll gain is “a very strong number, but perhaps not as strong as the headline number would suggest,” given the inflated effect of returning grocery-store workers in California and favorable weather conditions in March. “I’d like to see 200,000 [job gains] or more [over the next few months] before proclaiming a sustained recovery in the labor market.”
– Bill Quan, economist, Mizuho Securities
* * *
One month of strong gains doesn’t make a trend but “this is the most hopeful sign that we have had that the economic expansion is becoming self-sustaining.” Any action by the Federal Reserve on interest rates “is still many months away, at the soonest.”
– Steven Wood, chief economist, Insight Economics
* * *
“It’s nice to see the [payrolls] revisions in January and February, which means the [March] number is probably more real” rather than an aberration in an otherwise sluggish hiring trend. “It’s confirming where everyone’s estimates had been.”
– Craig Coats, head of fixed income, Keefe, Bruyette and Woods
* * *
“At least some of the increase in payrolls reflects the end of the supermarket strike in California and better weather in March. … [B]ut this surely does not account for the entire increase.”
– Ian Shepherdson, chief U.S. economist, High Frequency Economics
* * *
“The net effect of returning grocery strikers was only plus-13,000 in March, so it was not a significant factor behind the strong outcome. This report probably represents some catch-up from earlier results that seemed to be weaker than implied by other labor-market indicators.”
– Joshua Shapiro, chief U.S. economist, MFR Inc.
* * *
“Temporary-help agencies, which have been one of the few industries hiring workers, trimmed payrolls last month, possibly indicating that some of these recent hires have been permanently added to the end-user’s payrolls.”
– David H. Resler, chief economist, Nomura Securities International Inc.
* * *
“What jobless recovery? … Firms, which had been depending upon productivity to get them through, apparently realized they had to hire workers to meet the rapidly expanding economy.”
– Joel L. Naroff, chief economist, Naroff Economic Advisors
* * *
The March payroll gain pushed the three-month average gain to 170,000 workers. Following the report, “There is no change in our GDP estimates, but the stronger employment news will reduce implicit productivity trends. From 5.0% in 2003, labor productivity should moderate, and achieving gains of 2.5%-3.0% [would] still be a story of strong productivity.”
– Stephen Gallagher, chief U.S. economist, SG Corporate & Investment Banking
March Payrolls Growth Soars Above Economists’ Forecasts 
April 2, 2004 10:37 a.m.
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