The US economy is likely to have added jobs for the fourteenth month in a row in February, with job growth continuing even in an already tight labor market as new Omicron cases fell earlier this year.
The Ministry of Labor is due to publish its report on jobs on Friday in February at 8:30 a.m. ET. Here are the key indicators expected from the press compared to the consensus estimates compiled by Bloomberg:
Non-agricultural wages: Expected +423,000, +467,000 in January
Unemployment rate: Expected 3.9%, 4.0% in January.
Average hourly income, monthly: 0.5% is expected, 0.7% in January.
Average hourly income per year: Expected 5.8%, in January 5.7%.
The January Jobs Report came as a significant surprise to investors, with more than 450,000 salaries back against the then-expected 125,000. Jobs for December were also revised up to a total of more than half a million.
“As the labor market tightens, we should expect some slowdown in job growth,” said Alex Pele, an economist at Mizuho Securities in the United States. “A larger share of employees will come from workers moving between companies than from unemployment or outside the workforce.
Data from the last few months have signaled that the main impetus in the labor market remains strong, even as the record jump in COVID-19 cases earlier this year temporarily dampened demand for workers, especially in the high-contact services sector. The February report is expected to reflect continued strength with widespread profits in the industry, especially as Omicron cases withdrew further in the weeks following the last job report.
“Reducing the number of COVID cases should provide further momentum in the background as revision of benchmarks paints a picture of a more sustained employment rate last year and early 2022 than previously estimated,” writes Sam Bullard, a senior economist at Wells Fargo. note. “The labor market remains tight and this must continue to be reflected in wages and salaries. Wage pressures are still increasing in most industries.”
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Average hourly wages are expected to jump 5.8% year-on-year, the largest increase since May 2020, when cuts among those at the bottom of the pay scale during the pandemic distorted wage growth to more high paying.
Wage growth is now widespread and sustainable, even as workers in various industries return to work. This, in turn, has contributed to the general rise in inflation in the US economy, although wages have not kept pace with rising consumer price inflation. The consumer price index last rose 7.5% in January from last year, the biggest jump in 40 years.
Taken together, evidence of much stronger-than-expected inflation and a steadily improving labor market has helped the Federal Reserve begin raising interest rates and otherwise eliminate its pandemic support mechanisms for the U.S. economy. Federal Reserve Chairman Jerome Powell offered an optimistic assessment of the US economic background during his six-month address to Congress earlier this week.
“The labor market is extremely tight … improvements in labor market conditions are widespread, including for workers at the bottom of the wage bill, as well as for African Americans and Spaniards,” Powell said in a statement to the public. Chamber of Financial Services Commission on Wednesday.
“Demand for labor is very strong, and while labor force participation has increased, labor supply remains weak,” Powell said. “As a result, employers are finding it difficult to fill jobs, an unprecedented number of workers are leaving to take up new jobs, and wages are rising at the fastest pace in many years.”
Most members of the Federal Open Market Committee would agree that the current employment situation is in line with maximum employment, Powell added. As a result, he said with unusual clarity that he would support raising the interest rate by 25 basis points after the next Fed meeting ended later this month, bringing the reference rate slightly above its current near-zero level.
The next meeting of the Federal Open Market Committee is scheduled for March 15 and 16.
This publication will be updated with the results of the February report on the jobs of the Ministry of Labor on Friday morning at 8:30 ET. Check again for updates.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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