U.S. payroll growth expected to be strong
Thursday, March 3, 2005 10:09:58 PM
afxpress.com
WASHINGTON (AFX) - After eight months of so-so job growth, the U.S. labor market probably added more than 200,000 net new jobs in February, economists say
The Labor Department will report on February nonfarm payroll growth on Friday at 8:30 a.m. Economists surveyed by MarketWatch have an average forecast of 221,000 new jobs, with a range of 150,000 to 300,000
The last time job growth exceeded 200,000 in a month was in October. In January, 146,000 jobs were added
The survey of 38 economists calls for the unemployment rate to remain steady at 5.2 percent. The average hourly wage is expected to rise 0.3 percent. Almost all the preliminary factors point to improved hiring in February. Jobless claims fell to four-year lows. Both online and newspaper help-wanted advertising improved. Consumers said jobs are more plentiful while businesses said they are ramping up their hiring
In addition, the weather was better in February than in January. There's a big upside risk to Friday's report. There's a good chance the consensus forecast is too low. The favorable factors, especially the improvement in initial jobless claims, are signaling job growth of 250,000 or more, but economists have been burned badly in the past year with their over-optimistic forecasts. In the past eight months, the consensus forecast has been too high six times, with an average overshoot of 72,000
So the economists are deliberately marking down their forecasts from what their computer models tell them. That makes perfect sense if structural changes in the economy have made their forecasting models obsolete. But it could be that they've just been having a run of bad luck
No economic data has a bigger impact on financial markets than the monthly jobs report. A payroll job gain below 200,000 would cause a temporary spurt in Treasury note prices and decline in the 10 year note yield toward 4.25 percent," said Stuart Hoffman, chief economist for PNC Financial Services. "Conversely, a payroll job gain above 300,000 would push the 10 year T. note yield toward 4.50 percent but likely help the stock market move higher." |
