Nation’s employment outlook remains bright
WASHINGTON – Even after the most vigorous three-month hiring spree in 17 years, U.S. employers are showing few signs of letting up.
Job growth for February, to be reported today, might not match the furious pace of November through January, when 1 million positions were added. Harsh winter weather likely discouraged some hiring.
Yet economists foresee a solid job gain of 240,000 and a drop in unemployment to a near-normal 5.6 percent – evidence of a job market that continues to outshine others around the world.
“People are pretty optimistic about the U.S. economy, and they’re hiring,” said Frank Friedman, interim CEO of Deloitte, the consulting firm that counts 80 percent of the Fortune 500 as clients.
A bright outlook among employers has translated into a robust average of 268,000 jobs added monthly over the past 12 months. That means there are 3.2 million more Americans earning paychecks now than at the start of 2014. That additional income, along with sharply lower gas prices, has left more Americans able to spend.
It also helps explain why the unemployment rate has sunk so far below the 10 percent peak it reached in 2009 even though the economy isn’t growing as fast as it often has during expansions: Increased customer demand is compelling employers to fill jobs.
In addition, many Americans who lost jobs in the recession have retired or given up looking for work and are no longer counted as unemployed.
Thursday, the government said the number of people who sought unemployment benefits rose last week to the highest level since May. Still, the four-week average of unemployment applications, which is less volatile, remains near a historically low level that typically signals healthy job growth.
It may turn out that some temporary factors held back job growth in February. Snow and ice storms in the Midwest and parts of the Southeast closed some businesses and possibly delayed hiring. Boston and other parts of the Northeast have been hit by enormous snowfalls.
Investment bank UBS estimates that such factors lowered February’s job gain by 25,000. Construction companies, auto dealers, and retailers are the sectors most likely to have been affected by winter storms and unseasonably cold weather.
Several industries may also be hiring less than in recent months or even cutting back. Oil and gas drilling companies have cut jobs in response to the 60 percent drop in oil prices since summer. Applications for unemployment aid have risen in such oil-heavy states as Texas, Oklahoma and North Dakota.
Yet the U.S. job market and economy, for all their obstacles, still are outdoing those of other major nations. Though Europe and Japan are showing signs of growing more than last year, their economies remain feeble. The euro currency union’s unemployment rate has started to fall, but at 11.2 percent it remains nearly twice the U.S. level.
Thursday, China lowered its economic growth target for 2015 to 7 percent from 7.5 percent last year as it tries to make its slowing economy more productive.
Mark Zandi, chief economist at Moody’s Analytics, expects the U.S. economy to grow 3 percent this year, which would be the first time it’s reached that level in a decade.