“Richard Yamarone, the chief economist at Argus Research, was pummeled by reality last month, when his forecast that employment would grow by only 44,000 in March met the reality of 308,000 new jobs,” writes Eduardo Porter in today’s New York Times.

” ‘I was creamed,’ ” he said.”

“But as investors await the Labor Department’s release of the April figures tomorrow morning, he is sticking to his guns, forecasting a slim gain of 95,000 jobs. ‘I could be blown out of the water again on this thing,’ Mr. Yamarone said. But ‘it just doesn’t feel like the economy created another 100,000 or 200,000 or 300,000 new payroll jobs last month.’ “

“Mr. Yamarone’s position is getting lonely, at the bottom end of the job forecast range. In an era when all forecasters have been widely missing the mark, he can point to his relatively respectable track record. Five times in the last 12 months, most recently in February, his curb-your-enthusiasm forecasts have been closer to the government’s actual data than the economists’ consensus tracked by Bloomberg News.”

“And he was far more prescient than many other, more bullish economists in predicting the overall growth of the economy in the first quarter.”

“But March’s jump in employment – well above the median forecast of 120,000 for that month – has convinced many Wall Street economists that the labor market is beginning to mend at last, offering an end to a jobless economic recovery that has confounded analysts.”

“By and large, economists do not expect April’s job growth to match March’s pace. But they have significantly upgraded their expectations. The median employment forecast compiled by Bloomberg News is that the economy added 170,000 jobs in April, the highest consensus forecast in more than a year. Some Wall Street economists are forecasting that as many as 250,000 jobs were added in April – 50,000 more than the most optimistic expectation for the previous month.”

“Yet as financial markets anticipate tomorrow’s employment report, Mr. Yamarone insists that a case can still be made that payroll growth will wither from its March bloom. ‘There’s no real reason for businesses to pick up hiring,’ he said. ‘They are still producing the goods to meet demand with the existing work force.’ “

“Employment figures are a big market mover these days. As the Federal Reserve has seemed to shy away from raising interest rates until it has solid evidence of sustained job growth, and inflation has been muted, most players in financial markets have taken the Labor Department’s monthly employment data as the crucial barometer now for interest rate moves.”

“The Fed has made the link between jobs and interest rates explicit. At its Open Market Committee meeting on Tuesday, it noted that ‘hiring appears to have picked up’ and concluded that at this juncture the monetary ‘policy accommodation’ – meaning the extraordinarily low interest rates – ‘can be removed at a pace that is likely to be measured.’

“Forecasting jobs has become one of an economist’s prominent tasks. Mark Kiesel, executive vice president of the fund management giant Pimco, noted the role now played by employment predictions from Wall Street economists.”

” ‘The forecasts are pretty important,’ he said, ‘because the markets are waiting for a signal of when rates are going higher. If the number is on the high side, say 250,000, the market will become increasingly of the view that the Fed will move in August.’ “