Economists at Goldman Sachs Group Inc. predicted that payrolls in the U.S. climbed by 125,000 in April, compared with a 120,000 increase the previous month.
Led by Jan Hatzius in New York, the group’s forecast compares with a 162,000 median estimate in a Bloomberg News survey of 79 economists ahead of the May 4 employment report from the Labor Department. Hatzius cited unseasonably warm winter as the main reason for the projection.
Gains in hiring and wages are needed to support household purchasing, which increased 0.3 percent in March, Commerce Department figures show. An unemployment rate exceeding 8 percent for more than three years helps explain why Federal Reserve policy makers are sticking to a plan to boost growth and employment by holding borrowing costs low through late 2014.
“We are forecasting a nonfarm payroll gain of just 125,000 in April because we expect a substantial payback for the warm winter,” Hatzius wrote in an April 27 note to clients. “The payroll acceleration in the winter was confined to the normally cold states. Moreover, the fact that March payroll gains in the cold states looked similar to the pre-winter norm suggests that most of the payback has yet to occur.”
Unseasonably mild temperatures may have spurred more hiring in some industries. The January to March period was the warmest first quarter in records going back to 1895, according to the National Oceanic and Atmospheric Administration.
The weather effect “will lead to a payback of at least 50,000 in the April report,” Hatzius wrote. “The evidence for slower U.S. growth is accumulating.”