Job reports paint a brighter picture

NEW YORK (CNNMoney.com) -- Three separate jobs reports released Wednesday signaled that the nation's employment picture may finally be brightening, and hinted that a government report due at week's end could show strong gains.

Private-sector employers added jobs in April for the third consecutive month, according to Automatic Data Processing (ADP).

Outplacement firm Challenger, Gray and Christmas said planned job cuts in April dropped to the lowest level in nearly four years.

And TrimTabs Investment Research said the nation added 262,000 jobs in April, boosted by government Census workers not included in the ADP report.

The reports came ahead of the Labor Department's monthly jobs figures, scheduled for release Friday. The April data are expected to show a gain of 187,000 jobs, compared to an increase of 162,000 jobs in March, with the unemployment rate holding at 9.7%.

There's a general tone that there's a slow recovery from the more than 8 million jobs lost during the past two years.

"Companies have cut to the bone, cutting off arms and legs. Now they are shifting from defense to offense," said John Canally, an economist for LPL Financial.

ADP, which processes paychecks for one in every six U.S. employees, said private-sector employers increased payrolls by 32,000 jobs in April, marking the third consecutive month of job gains.

The jump was more than economists expected. Economists surveyed by Briefing.com had forecast a gain of 30,000 jobs in the month. The March private-payroll figure was revised to an increase of 19,000 jobs from the previously reported loss of 23,000.

ADP chief executive Gary Butler said that he is "cautiously optimistic" that rising economic activity, coupled with recent legislated incentives to employers for job creation will lead to continuing job growth in the private sector.

The service sector reported an increase of 50,000 jobs in April, marking the third consecutive monthly gain and the highest job growth since September 2009. Manufacturing employment rose 29,000, a third month of gains.

However, that growth was offset by a loss of 18,000 jobs in the goods-producing sector and a drop of 49,000 constuction jobs. Jobs in construction fell for the 39th straight month from a peak in January 2007.

Medium-sized businesses, those with between 50 and 499 workers saw employment rise by 17,000, while large businesses, those with 500 or more workers, had an increase of 14,000 jobs. Small businesses with fewer than 50 workers eked out a small gain of 1,000 jobs in April.

Joel Prakken, chairman of Macroeconomic Advisers, attributed the lag in small business job growth to problems with acquiring credit to expand and uncertainty around costs related to regulations such as health care.

Employers announced plans to eliminate 38,326 jobs last month, according to outplacement firm Challenger, Gray & Christmas Inc. That's down 43% from the previous month, when job cuts surged 61%, and the lowest level since July 2006.

"It is certainly a promising trend that suggests most employers are increasingly confident about conditions going forward and slowing the pace of job cutting," said John Challenger, chief executive officer of Challenger, Gray & Christmas.

Employers announced 71% fewer job cuts in April than they did a year earlier, when 132,590 jobs were expected to be eliminated.

In addition, 69% fewer job cuts are planned in the first four months of 2010 than during the same period last year. And if the downsizing continues at this pace, job cuts during the full year could fall below 700,000 for the first time in 10 years, Challenger said.

The outplacement firm cited the retail sector as a bright spot so far this year. The industry cut only 21,267 jobs in the first four months of the year, compared to 80,000 cuts during the same period last year.

"However, this does not necessarily mean a hiring boom is just around the corner," said Challenger. "Hiring is likely to increase in the coming months, but many employers are stubbornly slow to hire in the onset of an expansion."

And while overall job cuts eased, the government and non-profit sectors continued to downsize, which Challenger attributed to rising state and local budget deficits, caused by high costs and decreasing tax revenue.

Employers in the government announced 14,973 job cuts in April, 182% more cuts than in the pharmaceutical industry, which eliminated the second-highest number of jobs.

A report from TrimTabs Investment Research estimated that the economy added 262,000 jobs last month. That number included 200,000 temporary Census workers, the company said.

Still, economists expect the job market to continue to improve, even after temporary workers are let go.

"May is the peak for Census hiring. Starting in June this will trickle off," said Canally of LPL Financial. "The private sector will take up the slack by then."

Despite bullish jobs estimates, the unemployment rate is expected to remain unchanged, since growth is not yet robust enough to replace the nearly 8 million jobs lost to the recession.

Although Canally said that the current unemployment rate has peaked and that a double dip recession is not imminent, he added that the source of the recovery's strength still lies with the consumer.

"Up to this point the average person doesn't believe we're in a recovery," said Canally, citing recent strong reports in the jobs, manufacturing, and housing sectors. "A couple of months in a row of job growth in the 200,000 to 250,000 a month range will start to convince people that we're in a recovery."