Employers in the U.S. probably hired more workers in February than a month earlier, showing companies were confident demand will bounce back from a weather-induced slowdown, economists project a report will show today.
Payrolls increased 149,000 last month after a 113,000 gain in January, according to the median forecast of 92 economists in a Bloomberg survey ahead of figures from the Labor Department. The jobless rate held at 6.6 percent, the lowest since 2008, the survey also showed.
Even with last month’s pickup, job gains remain smaller than those seen for most of last year as winter storms and freezing temperatures across the eastern U.S. slow consumer spending, housing and manufacturing. The Federal Reserve is trying to determine how much of the recent cooling has been due to weather, which means the outlook for monetary policy may not become clearer until March data becomes available.
“The weather has been affecting the numbers, but there is no way to tell how or by how much,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. Stanley is among the best forecasters of the jobless rate in the past two years, according to data compiled by Bloomberg. “My view is that job growth has really held steady.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey payroll estimates ranged from increases of 100,000 to 220,000. Last year, the U.S. added 194,000 jobs each month on average.
Recent data indicated hiring was subdued in February. The Institute for Supply Management this week said its employment gauge for the services industry slumped to the lowest level since March 2010. A report from the ADP Research Institute showed companies added fewer workers than projected.
Faster employment growth that stokes wage gains and brightens consumer spirits may help embolden households, whose spending accounts for almost 70 percent of the economy.
“Wages have been fairly stable, and consumers aren’t willing to borrow to increase consumption, which means businesses are cautious in expanding and hiring workers,” said Bricklin Dwyer, an economist at BNP Paribas in New York. “We expect a gradual improvement. It’s just not going to happen overnight.”
Today’s report may also show employment excluding government agencies climbed 145,000 in February, little changed from the 142,000 gain the prior month, according to the survey.
The period ended Feb. 15 was the coldest second week of February since 2011, according to weather-data provider Planalytics Inc. A winter storm swept through the South and along the East Coast during the time the Labor Department surveys businesses to calculate payrolls. February’s winter blitz followed the chilliest January in three years.
Bad weather hurts the count if employees received no compensation for the pay period that included the 12th. At the same time, a separate survey of households that’s used to calculate the unemployment rate counts a person as employed if they’re away from the job due to weather.
In today’s report, the jobless rate may be influenced by the expiration of emergency unemployment benefits at the start of the year. With the end of financial assistance, some Americans may have stopped looking for work and would no longer be counted as part of the labor force. This is among reasons economists at JPMorgan Chase & Co. project joblessness dipped to 6.5 percent.
While an improving economy is generating job growth and helping reduce unemployment, the process is accelerating as jobless workers leave the labor force.
Labor force participation was 63 percent in January after falling a month earlier to 62.8 percent, matching the lowest level since 1978. Economists differ on whether retirement or a greater number of discouraged workers is behind the decline.
“The center of gravity in that debate is starting to shift toward the demographic story, the structural story,” Stanley said. “The implication is that there is a little less slack than people would think, and I think that debate’s happening at the Fed as well.”
As unemployment eases closer to its 6.5 percent threshold, the Fed has de-emphasized the jobless rate as a point at which it would consider raising borrowing costs. Labor-market improvement is one reason why policy makers have dialed back monthly bond buying by $10 billion at each of its past two meetings.
While Fed Chair Janet Yellen reiterated the threshold while testifying before the Senate Banking Committee Feb. 27, the Federal Open Market Committee debated “the reliability of the unemployment rate as an indicator of overall labor-market conditions,” minutes of Fed officials’ last meeting showed.
Lowe’s Cos. is among those planning to hire as the nation begins to thaw out. The Mooresville, North Carolina-based home improvement retailer announced Feb. 19 that it will be adding about 25,000 seasonal employees this year for the industry’s busiest season.
“Warmer temperatures stir homeowners to get started on projects they’ve planned during winter,” said Scott Purvis, vice president of human resources. Housing has been a bright spot in the economy over the past year.
Also today, a report from the Commerce Department is projected to show the U.S. trade deficit was little changed at $38.5 billion in January compared with $38.7 the prior month, according to the median estimate of economists surveyed.
To contact the reporter on this story: Jeanna Smialek in Washington at firstname.lastname@example.org