WASHINGTON (AP) – Businesses likely posted a second straight month of solid job gains in March, as slow but steady economic growth translated into more hiring.
Economists expect the nation added 185,000 jobs last month, and the unemployment rate stayed at 8.9 percent. That would follow February’s strong gains of 192,000 jobs - the most in almost a year.
If forecasts prove roughly accurate, February and March will mark the best two-month stretch for private-sector hiring since the recession began.
“The labor market recovery is gathering momentum,” Ian Shepherdson, chief US economist at High Frequency Economics, said. Hiring has picked up as unemployment applications have dropped, he said, “and we think there is more to come.”
Manufacturing firms are growing at their fastest pace in seven years. Large companies are also stepping up their hiring plans, according to a survey of big multinational corporations released Wednesday.
Most economists expect the private sector added at least 200,000 new jobs, offsetting anticipated cuts made by state and local government. An increase of 200,000 would also raise the average private-sector job gain in the first three months of the year to 163,000, the fastest three-month pace since January 2007.
Small businesses are increasingly confident about the business outlook and are finding it easier to get credit, said John Ryding, chief economist at RDQ Economics.
And many companies that were reluctant to hire earlier in the recovery, fearing the rebound wouldn’t last, are finally taking the plunge and adding new workers, he said.
“There comes a point where people have to commit to more hiring and expand,” Ryding said.
Analysts predict the economy will add jobs at roughly the same pace for the rest of this year, generating about 2.5 million new positions. Still, that will only make up for a portion of the 7.5 million jobs that have been lost since the recession began in December 2007.
The unemployment rate is at its lowest point since April 2009, having dropped nearly a full percentage point in three months. Still, one reason for the lower unemployment rate is that many people who stopped looking for a job during the recession still aren’t looking for one. So they are not counted as unemployed.
The proportion of people who either have a job or are looking for one is surprisingly low for this stage of the re-covery. If many of them start looking for work again, they will be counted as unemployed. So the unemployment rate could go up, even if the economy adds jobs.
Still, the economy faces potential pitfalls. Rising food and gas prices are giving consumers less money to spend on other goods and services, a factor that could slow economic growth in the coming months. And the battered housing market shows no sign of improving.
Michelle Meyer, an economist at Bank of America Merrill Lynch, said the nation’s gross domestic product – the broadest measure of the output of goods and services – will grow only 2.6 percent in 2011, a modest pace after such a deep recession. That’s likely to keep employment gains from accelerating beyond the 150,000 to 200,000 range for the rest of the year.