US employment rise adds weight to belief recession is over

WASHINGTON - The biggest increase in employment in three years makes it pretty clear the deepest US recession since the 1930s has ended, said the head of the group charged with making the call.

Payrolls rose by 162,000 workers last month, the third gain in the past five months and the most since March 2007, figures from the US Labour Department showed.

"I personally put lots of emphasis on employment," said Robert Hall, who heads the National Bureau of Economic Research's Business Cycle Dating Committee. "I would say 'pretty clear' is a good description" for whether the economic contraction has ended."

Among the top indicators the group uses is payrolls, its website says. The Government revised the January and February job count up by a combined 62,000, putting the March gain at 224,000 after including the updated data.

"It's great news that employment has finally stopped shrinking," Hall, a Stanford University professor, said.

The report showed the payroll count from the Government's survey of businesses and the employment numbers from a separate survey of households have both been heading higher, Hall said. "That is looking better now.

"I think the odds favour a continuing expansion in employment, but I don't have great confidence."

The economy probably grew by 2.8 per cent in the first quarter of this year, according to the median estimate of a Bloomberg News survey of economists last month, after a 5.6 per cent pace of expansion in the fourth quarter of last year.

The committee waits to make a declaration until it can precisely date the start or end of a contraction, which usually takes six to 18 months, its website says.

"Our committee will continue to operate in a deliberate model," Hall said.

The panel has lagged declarations of other economists partly because it depends on payrolls, among the last economic indicators to show growth.

The National Association for Business Economics said in October the recession had ended, while Federal Reserve Chairman Ben Bernanke said in September the contraction "very likely" had stopped.

"Speaking personally, it now seems very clear that the recession has ended," said another panel member, Harvard University professor Jeffrey Frankel, yesterday. He has said the most likely date for the recession's end would be the middle of last year.

Economic output has been rising since around June or July, he said, while employment has only recently started to rise.

- BLOOMBERG