Labor Dept. likely to report that job growth has rebounded

The government’s employment report for April, which will be released this week, is likely to show a rebound in job growth. A busy week of economic news also features a Federal Reserve meeting and fresh readings on consumer spending, as well as manufacturing and service-sector activity.

Consumers pulled back on spending early this year after they opened their wallets for the holidays. A big reason was a drop in auto purchases after a surge late last year as Texas and Florida residents replaced cars damaged by hurricanes. Also curtailing consumption were delays in tax refunds and harsh winter weather. As Americans benefit from solid job and income growth, economists look for a healthy bounce-back in March. On Monday, the Commerce Department is likely to report a 0.4% increase in consumer spending.

On Tuesday, the Institute for Supply Management will release its index of manufacturing activity. Amid a strong global economy and rising oil prices that spurred more drilling, the index has hovered near the highest levels in more than a decade. Concerns over growing U.S. trade conflicts with other countries have damped business sentiment, Nomura economist Lewis Alexander says.

After raising interest rates by a quarter percentage point in March, the Fed is likely to stand pat at a meeting Wednesday. The biggest question is whether the central bank will lift rates three or four times this year, but that’s not likely to be clarified by a postmeeting statement.

On Thursday, the ISM will release its index of service-sector activity. Like the manufacturing measure, it has been elevated, but worries over trade could take a toll, Alexander says.

Job growth was surprisingly strong at the start of the year, but March brought a significant retreat as employers added 103,000 jobs. Economists largely wrote off the poor performance as a natural pullback after unseasonably warm weather pulled forward hiring to January and February. Even so, monthly job gains have averaged a sturdy 202,000 this year.

An upswing is likely: The Labor Department is likely to announce Friday that the economy added a solid 185,000 jobs in April.