WRAPUP 5-Private sector hiring lifts U.S. March payrolls

* U.S. nonfarm payrolls rise 162,000 in March

* Private hiring strongest in almost three years

* Hiring for U.S. census pads payrolls by 48,000

* Unemployment rate steady at 9.7 pct, average workweek up
(Adds details, Obama comments)

By Lucia Mutikani

WASHINGTON, April 2 (BestGrowthStock) – U.S. employers created jobs
in March at the fastest rate in three years as private firms
stepped up hiring, the strongest signal yet that the economic
recovery is on a solid footing and needs less government help.

Nonfarm payrolls rose 162,000 and the unemployment rate
held steady at 9.7 percent for a third straight month, the
Labor Department said on Friday.

The payrolls increase, only the third since the economy
sunk into recession in late 2007, was the largest since March
2007. Private employers hired more workers than expected, while
temporary hiring for the U.S. decennial census came in below
economists’ forecasts.

“The report suggests that the economy has broken through to
sustained job creation. But it will be a long slog to bring
down the unemployment rate,” said Nigel Gault, chief U.S.
economist at Global Insight in Lexington, Massachusetts.

Job growth is critical to keeping alive the economic
expansion that started in the second half of 2009 once
government stimulus efforts and a boost from business inventory
rebuilding fade.

The U.S. dollar touched a fresh seven-month peak against
the yen on the upbeat employment report, while the yield on the
benchmark 10-year Treasury note jumped to a 9-1/2 month high.
U.S. stock index futures rose slightly.

Payrolls for January were revised upward to show a 14,000
gain instead of a loss of 26,000, while February was adjusted
to show only a loss of 14,000. Previously, February had been
reported as down 36,000.

Economists had expected nonfarm payrolls to rise 190,000
last month, but they said the solid rise in private-sector
hiring gave the report a stronger-than-expected tone.

The government hired 48,000 temporary workers last month
for the decennial census, while private payrolls jumped
123,000, the biggest increase since May 2007.

Blizzards weighed on hiring in February and last month’s
jobs gains partly reflected a bounce back. Still, analysts said
private payrolls would have risen without that boost.

The jobless rate held steady as discouraged workers
returned to the labor force to look for jobs, another factor
that analysts took as a positive sign.

The labor market has lagged the economy’s recovery from the
worst downturn since the 1930s, creating a political challenge
for President Barack Obama.


Obama’s popularity has taken a hit along with that of
fellow Democrats in the face of high unemployment despite his
efforts to paint rival Republicans under former President
George W. Bush as responsible for the economic mess he

Republicans said the jobs report was mildly encouraging but
the unemployment rate remained too high.

Obama acknowledged more work needed to be done to put back
to work the more than 8 million Americans who have lost their
jobs since the economy was struck by recession.

“We are beginning to turn the corner,” Obama said in
Charlotte, North Carolina. “Today’s job numbers, while welcome,
leave us with a lot more work to do. It will take time to
achieve the strong and sustained job growth that we need.”

Some analysts said the relatively strong details of the
report suggested the economy was on a path that could lead the
Federal Reserve to raise benchmark interest rates as early as
late this year.

The U.S. central bank has promised to keep overnight rates
— currently near zero — ultra low for an extended period,
citing subdued inflation and the likelihood the economic
recovery will be moderate.

The Fed has identified unemployment as one of the factors
that will determine when it will start raising rates.

“If the rest of the data flow this month proves healthy, we
believe the Fed will consider removing the ‘extended period’
language at the April 28 meeting and start hiking rates in
September,” said Michelle Meyer, an economist at Barclays
Capital in New York.

Construction payrolls grew 15,000 last month after dropping
59,000 in February, reflecting the turn in the weather.
Manufacturing added 17,000 jobs in March.

Payrolls in the service sector increased as retail
employment climbed 14,900. Government employment rose 39,000.

The jobs picture was further brightened by temporary help
payrolls, which increased 40,900 in March. Temporary
employment, which is seen as a precursor to full-time jobs, has
grown by 18 percent since September.

The average workweek rose to 34 hours from 33.9 hours in

Despite the sharp turnaround in employment last month,
weaknesses persist. A broad measure of unemployment that
includes workers who want a job but have stopped looking and
those working part time for economic reasons edged up to 16.9
percent from 16.8 percent in February.

A record 44.1 percent of unemployed workers in March had
been out of a job for 27 weeks or more.

“Companies cut jobs too fast and too deep at the start of
the downturn. They remain skittish about hiring, but even
moderately positive sales growth may force their hand,” said
Bill Cheney, chief economist at John Hancock in Boston.


Graphic on jobless rate: http://link.reuters.com/jyp36j

Graphic on payroll jobs: http://link.reuters.com/cyp36j

Reuters Breakingviews [ID:nN02166365]

Stock Research

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

WRAPUP 5-Private sector hiring lifts U.S. March payrolls