Employers likely added more jobs in February, but economists say there’s no bounce back yet
- Economists expect 210,000 jobs were created in February, an improvement from January's 49,000.
- The February employment report was likely impacted by the deep freeze in Texas and parts of the south, as well as snowstorms in other areas.
- Hiring in some of the industries affected by social distancing, like restaurants, likely improved. Those fields should gain momentum in coming months as more of the population is vaccinated.
Hiring likely improved in February as more of the economy reopened, but winter weather could have hampered some activity.
Economists expect to see 210,000 payrolls were added in February, compared to just 49,000 in January, according to Dow Jones.
The unemployment rate is expected to have remained at 6.3%, but in coming months the level is likely to keep dropping as more of the public becomes vaccinated and service sector jobs return.
The range of expectations for job growth is wide, with Citigroup economists expecting 410,000 payrolls were added in February.
The U.S. Bureau of Labor Statistics is expected to release the employment report at 8:30 a.m. ET Friday.
"After two months of softer monthly employment reports, we expect a solid increase in February jobs of 410k. The reference period for the February payrolls report sits on the brink of new re-openings after increased activity restrictions and business closures over the winter months. Strength in our forecast is tied to rehiring of leisure and hospitality employees," the Citigroup economists wrote.
Moderate improvement expected
But Michael Gapen, chief U.S. economist at Barclays, said he does not expect that much strength in February.
Gapen said there are signs hiring improved starting in mid-February, and he expects just 100,000 jobs were added.
"It's right to expect momentum in the labor market will improve with the combination of reduced case counts and general easing in restrictions, and moving away from adverse weather may bring you a bounce in the March employment number," he said.
"I think December was the trough," Gapen said. "January was a little better and February and March should get a little better than that. I think the debate is how much showed up in February versus March."
He said he expects weather will be a factor for the report, and construction and manufacturing jobs were likely affected by that.
"I still think the most important numbers are the vaccination numbers, and the jobs will come after that," said Gapen. "I think the vaccine information is still the first order information, and things like employment are the validating factors."
Gapen said vaccinations are running ahead of his expectation slightly and he expects herd immunity by the third quarter, depending on whether any variants of the virus begin to hamper the effort to contain the pandemic.
He said the economy should be getting on the way back to normal by the third quarter, but the economy still is down by about 10 million jobs and hiring will have to speed up.
"I think we'll have above normal job growth in Q2 and Q3. I say something on the order of 500,000 a month in Q2, and 750,000 monthly in Q3," he said.
Diane Swonk, chief economist at Grant Thornton, said a year ago February was the last pre-pandemic month for hiring, and the unemployment rate was at just 3.5%. She expects just 150,000 jobs added in February this year.
"This is the one-year benchmark. It's a long way from home," she said. In April last year, there were more than 20 million jobs lost in one month.