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US Job Growth Likely Rose in February 03/05 06:15
WASHINGTON (AP) -- America's employers likely stepped up their hiring in
February as confirmed viral cases declined, consumers spent big chunks of their
government aid checks and the economy appeared to be sustaining a tentative
recovery.
Economists have forecast that job growth reached 175,000 last month,
according to data provider FactSet. That would mark a sharp improvement over an
average of just 29,000 jobs a month from November through January.
Yet with the nation still 10 million jobs short of its pre-pandemic level,
monthly hiring would need to significantly accelerate to bring relief to the
many people who remain laid off, especially at restaurants, hotels,
entertainment venues and other areas of the hospitality industry that are far
from recovered. The unemployment rate is predicted to have ticked up from 6.3%
to 6.4% on the assumption that more Americans started looking for work in
February and began to be counted as unemployed.
One year into the pandemic, most analysts are growing more optimistic that
hiring will accelerate in the coming months, with the economy strengthening and
gauges of consumer spending and manufacturing rising. Americans as a whole have
accumulated a huge pile of savings after having slashed spending on travel,
movie tickets and visits to bars and restaurants. Much of that money is
expected to be spent once most people feel comfortable about going out.
And nearly all of President Joe Biden's $1.9 trillion economic rescue
package looks likely to win approval in Congress in the coming weeks. It would
provide, among other things, $1,400 relief checks to most adults, an additional
$400 in weekly unemployment aid and another round of aid to small businesses.
With so much money being pumped into the economy, Oxford Economics now
forecasts that growth will reach 7% for all of 2021, which would be the fastest
calendar-year expansion since 1984. The Congressional Budget Office projects
that the nation will add a substantial 6.2 million jobs this year, though that
wouldn't be nearly enough to restore employment to pre-pandemic levels.
Still, the size of the Biden relief package, coming as the economy is
already showing improvement, has stoked fears that growth could overheat and
spur higher inflation, send borrowing costs up and lead the Federal Reserve to
jack up interest rates. Those fears have roiled financial markets for the past
two weeks.
Fed Chair Jerome Powell sought to assuage those concerns on Thursday ---
without success, based on sharp selloffs in the stock and bond markets --- when
he suggested that any meaningful rise in inflation would likely prove temporary
and that the Fed would be in no hurry to raise its benchmark short-term rate.
Nor did Powell offer any hint that the Fed would act to push back against a
surge in the yield on the 10-year Treasury note, which has jumped from about
0.9% last year to 1.5% late Thursday. Still, Powell sounded some optimistic
notes. Citing in part the increasing distribution and administering of
coronavirus vaccines, he said, "There's good reason to expect job creation to
pick up in the coming months."
Other recent economic reports have also suggested better times ahead.
Americans sharply increased their spending at retail stores and restaurants in
January, when the $600 relief checks were mostly distributed. Retail sales
jumped 5.3%, after three months of declines.
Factory output also picked up that month, and demand for long-lasting
goods, such as autos and aircraft, rose 3.4%, the government said last week.
Home sales have been on a tear for most of the past year, driven by low
mortgage rates and the desire of many Americans for more space during the
pandemic. A huge jump in the proportion of people working from home has also
driven up sales, which were nearly 24% higher in January than a year earlier.
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