The US economy is expected to post a modest improvement in job gains for the month of February, highlighting how the labour market continued to struggle even as coronavirus cases are rapidly declining.
According to economists’ forecasts published by Refinitiv for non-farm payrolls data due on Friday morning, US employment is expected to have grown by 182,000 positions last month.
That would compare to job creation of 49,000 in January and a decline in December. The unemployment rate is expected to have remained at 6.3 per cent.
The figures from the US labour department will offer critical guidance to economists and policymakers about the trajectory of the US recovery at a moment of high sensitivity in the markets, with both equities and long-term US Treasuries hit by a sell-off on Thursday.
Many economists have recently upgraded their outlook for growth in 2021 on expectations of a swift vaccination rollout and the implementation of president Joe Biden’s $1.9tn stimulus plan.
But Jay Powell, the Fed chairman, sparked the market losses on Thursday after he said that the US central bank was unlikely to act in response to any temporary jump in inflation or rise in debt yields caused by the economic improvement.
The labour market is one of the weakest spots of the US recovery, with nearly 10m fewer Americans employed compared to the start of the pandemic, mainly in service-sector jobs most affected by the crisis.
After the dramatic hit suffered in March and April of last year, Americans went back to work in large numbers over the summer, but that progress stalled worryingly over the winter months.
Economists fear that even as jobs growth accelerates this year as the pandemic recedes and more fiscal support is added, many Americans will fail to return to their old jobs and could even be left out of the workforce.