PREVIEW-Census hiring to boost US nonfarm payrolls in March

* WHAT: U.S March employment report

* WHEN: Friday, April 2 at 8:30 a.m. EST (1230 GMT)

REUTERS FORECASTS:

* The median forecast for nonfarm payrolls is for a rise of
190,000 in March after falling 36,000 in February. Forecasts
range from a loss of 50,000 to an increase of 400,000, an
indication of the uncertainty surrounding the impact of hiring
for the 2010 census.

* The unemployment rate is forecast steady at 9.7 percent.
Forecasts range from 9.5 percent to 9.9 percent.

* The average work week for all employees is seen edging up
to 33.9 hours from 33.8 hours in February. Forecasts ranged
from 33.8 hours to 34.0 hours.

FACTORS TO WATCH:

U.S. nonfarm payrolls probably increased in March, boosted
by hiring for the decennial census and a snapback from
February’s weather-related losses. This would mark only the
second time payrolls have increased since the recession started
in December 2007.

Analysts reckon census hiring could have boosted employment
by as much as 100,000 in March after adding 15,000 in February.
Private-sector hiring and the return to work of people who had
dropped off after being shut at home during February snowstorms
will account for the rest of the expected gains in employment.

The survey of business establishments, from which the
payrolls number is derived, counts as unemployed any workers
who do not receive any pay for the entire pay period.

According to the Census Bureau, there are 1.17 million
temporary census positions for fiscal 2010, which started in
October. A total of 17,000 temporary workers were hired in the
first quarter, with an additional 181,000 hires planned for the
three months from January to March.

The bulk of the census jobs, 971,000 temporary workers, is
scheduled for the April-to-June period.

Construction and retail payrolls, also hit by weather
disruptions, will probably improve in March and contribute to a
modest gain in the average work week for all employees.

The rise in employment should keep the jobless rate steady
at 9.7 percent for a third straight month, though analysts
expect it to rise as improving labor market conditions lure
discouraged workers back into the labor force.

The unemployment rate is closely watched by the Federal
Reserve. Analysts believe the U.S. central bank will only start
raising benchmark interest rates, currently near zero, once the
jobless rate has peaked and begins to fall.

The census-driven job gains could ease some political
pressure on President Barack Obama who has made tackling
unemployment his number one goal. However, the private sector
will have to generate in excess of 100,000 jobs a month to
significantly reduce unemployment. Since the start of the
recession about 8.4 million jobs have been lost.

Job creation is critical to sustaining the economy’s
recovery, which started in the second half of 2009, from the
most painful downturn since the 1930s.

MARKET IMPACT:

Investors are keen to see more signs that the economic
recovery is gaining momentum and the profit outlook is
brightening up to justify the optimism that has propelled U.S.
stocks to 18 month highs.

A more upbeat nonfarm payrolls report should provide a
fresh catalyst for the run-up that has now driven the Dow Jones
industrial average close to 11,000 — a level it last surpassed
in September 2008.

A less upbeat report could spur some profit-taking, albeit
with very little relative volume as some players would likely
still be out for the long Easter weekend.

If Friday’s payroll figure meets forecasts, bond prices
likely will remain nearly steady as traders shift their focus
on next week’s supply of long-dated debt.

A resumption of job growth that is much stronger than
estimated could spark a sell off and send benchmark 10-year
yield toward 4 percent, a level not seen since June 2009.

Stronger-than-expected payrolls growth would boost hopes of
a sustained turnaround in the labor market and accelerate
expectations of interest-rate hikes by the Fed, benefiting the
U.S. dollar. Moves in the greenback could be exaggerated by
thin market conditions as the employment data will be released
on Good Friday and the U.S. stock market will be closed.

However, concerns about Greece’s debt woes may keep
pressure on the single currency, with analysts saying it’s only
a matter of time before euro/dollar hits $1.30.
Stock Basics

(Reporting by Lucia Mutikani, Ellis Mnyandu; Richard Leong
and Wanfeng Zhou; Editing by Andrew Hay)

PREVIEW-Census hiring to boost US nonfarm payrolls in March