February Might Have Been a Rebound Month for Jobs
Investors are closely monitoring some key points of data this week that will show how the economy is doing. The jobs report from the Labor Department is expected to show an increase in job growth, economists say.
Low oil prices, a strong dollar and slow manufacturing growth have led to a weak outlook in global stock markets, USA Today reports.
Meanwhile, on Tuesday, the Institute of Supply Management will report its manufacturing index. Economists expect this index to increase for February, but this would simply indicate that manufacturing activity contracted at a slightly slower pace. It does not necessarily mean that manufacturing activity picked up its pace.
More Homes and Commercial Building
Construction activity is improving. In 2015, the sector hit post-recession highs, but in the second half of the year, it lagged because of the struggling industrial sector. With increased demand from millennials looking for their first homes, building in the residential sector edged higher in recent months. Commercial construction also improved in January. Economists expect construction spending to improve by 0.4 percent for January.
Slow Job Growth for January
January was a slow start for job growth, with employers only adding 151,000 jobs. In the fourth quarter of 2015, an average of 279,000 jobs were added each month, and for 2015 as a whole the average was 228,000.
Thanks to warm temperatures coming late last year, jobs added toward the end of the year spiked. It was expected that the start of 2016 would come a little slower as far as jobs go.
A Better February
Surveys show that economists believe that February's job report will show about 200,000 jobs added for the second month of the year. The unemployment rate is currently at 4.9 percent, and that is not expected to change following Friday's report.
If Friday's job report exceeds the 200,000 level, investors might receive an added boost of confidence in the economy.
Also, fewer people are filing unemployment claims, and by mid-February claims were at their lowest level in years. There are currently a record number of open jobs. It is possible that unemployed individuals are finding these open jobs, Marketwatch reports.
"With solid employment growth, a declining unemployment rate, and historically low initial claims suggest that concerns of a near-term U.S. recession are overblown," economists at Barclays Capital wrote in a report.
Companies Want to See Good Data
It is possible that a poor ending to 2015 and a slow start in 2016 will cause companies to hold off on hiring employees in the short term. These companies might want to take a "wait-and-see" approach before making hires.
This week will be important for companies and job seekers alike. With auto sales numbers, manufacturing reports, the service-sector growth numbers and factory reports, the report this week will likely provide an in-depth glimpse at the economy. If all or most of these reports come in with healthy numbers and the February jobs report is over 200,000, hiring should continue.
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