There’s a growing sense among economists that the U.S. recovery is gaining steam, a view heavily supported by a marked improvement in jobs data. Yet there’s also some lingering doubt about whether the labor market has improved as much as the data suggest. While hiring has accelerated since the end of last summer, businesses are still not rushing to add workers.
“What’s driving the payroll growth is fewer firings,” said Neil Dutta, an economist at Bank of America/Merrill Lynch. “Hiring hasn’t picked up in any major way.” Economists — and Americans looking for work — will get a better idea of whether hiring is truly on the upswing with Friday’s monthly employment report for February. Democrats and Republicans will also pay close attention as they jockey for political advantage ahead of the 2012 election.
The jobs report is the highlight of this week’s economic calendar, which also includes the monthly U.S. trade deficit and factory orders. Economists forecast the U.S. added 208,000 jobs in February, with the unemployment rate holding steady at 8.3%.
If hiring meets or exceeds the forecast, financial markets may react with good cheer on Friday when the data is released. It would mark the third straight month of job growth above 200,000 and probably pull the unemployment rate down slightly.
“The labor market has definitely gotten stronger,” said Gus Faucher, senior economist at PNC Financial Services. “Everything is looking good for job growth.”