Bloomberg (03/25/13) Rich Miller; Shobhana Chandra

Companies are stepping up hiring as the economy improves, and the result, say Maury Harris of UBS Securities LLC and Allen Sinai of Decision Economics Inc., is that payroll growth is vaulting to a faster pace of about 200,000 a month, after averaging 167,000 in the second half of last year. “The new normal is 200,000,” says Sinai, chief executive officer of the investment-research company. Payrolls may rise 216,000 this month after climbing 236,000 in February, the most since November, he estimates.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, has identified three leading indicators of the labor market: changes in jobless claims; temporary help; and the ability of small businesses to hire the employees they need. All three have improved, with applications for jobless benefits averaging 339,750 a week in the four weeks ended March 16, the lowest since February 2008. An increase of 16,000 jobs in February brought temporary-help-services payrolls to 2.58 million, the highest since August 2007 and up from 1.75 million in June 2009, when the U.S. emerged from the 18-month recession. The increased access to bank loans is particularly crucial for small businesses as many lack the ability to tap other sources of credit. That’s one reason why Harris sees payrolls continuing to expand, despite some employers’ concerns they’ll have to shell out more next year for health benefits under the Patient Protection and Affordable Care Act.