US jobs recovery from Covid-19 crisis looks robust

Bloomberg

The US economy probably notched up another bumper month of hiring in April, tallying with other reports that suggest growth momentum is building in the wake of the coronavirus crisis.
Payrolls may have risen by 978,000, according to median estimate of economists, above the 916,000 gain in March, while unemployment is seen falling below 6%. The Labour Department report will wrap up another busy week of data that also includes April surveys of manufacturers and service providers.
Covid-19 vaccination rates continue to climb, while the Biden administration is eager to keep the federal spending spigots wide open to add more fuel to economic recovery. The government said the economy expanded at an annualised 6.4% in first quarter, spurred by the second-fastest rate of household spending since the 1960s.
Such demand, which is starting to invigorate activity in the pandemic-restrained service sector, is prompting employers to beef up headcounts. Manufacturers alone are projected to have added about 60,000 in April, the most in 10 months.
Even with an almost 1 million increase in April employment, payrolls will be about 7 million shy of their pre-pandemic level, a reason Fed
policy makers kept their benchmark interest rate near zero at last week’s meeting.
“The ‘jobs deficit’ relative to pre-pandemic levels remains roughly as wide as it was coming out of the recession of 2007-09. For this reason, Powell has expressed the desire to see a ‘string’ of jobs reports similar to March to feel confident that the economy is on a durable trajectory. An April gain in the vicinity of 1 million is a start, to be sure, but far short of what centrists on the FOMC might consider a ‘string,’” said Carl Riccadonna, Yelena Shulyatyeva and Andrew Husby of Bloomberg Economics.
Policy makers in eastern Europe also seem hesitant to raise borrowing costs. In Poland no change is expected despite a pickup in inflation.
, while in the Czech Republic, officials have already said rate hikes forecast for this year may come later than planned.