This morning, the much-anticipated jobs report for February comes out, and policymakers are crossing their fingers for some good news.
The economy has been hit with some discouraging trends in the last few weeks. The gross domestic product was lower than initially reported last quarter. Home prices are sliding. Middle Eastern turmoil has sent energy prices higher, which can take a bite out of consumer spending. All of these factors could threaten already meager hiring trends.
But so far the estimates for February job growth are pretty cheerful. The median forecast, according to Bloomberg's survey of Wall Street analysts, is a net gain of 196,000 nonfarm payroll jobs, after a gain of 36,000 in January. If the latest forecast materializes, it would be the fastest job growth since last May, when the numbers were lifted by temporary census-related hiring.
A few factors go into this more optimistic number. For one, the number of initial jobless claims fell last week to its lowest level in three years. Economists are hoping that this reflects a stronger job market, although the number of unemployment claims may have been somewhat depressed by the unusually late Washington's Birthday holiday this year.
Additionally, the January number is believed to have been especially low because of snowstorm-related office closures that month. The February numbers may therefore benefit from a bounce back from a low base.
A nearly 200,000 increase in nonfarm payrolls would of course be a welcome development, but it's still not fast enough to recover much ground lost during the recession. Since the downturn began in December 2007, the economy has shed, on net, 7.7 million jobs, or about 5.6 percent of its nonfarm payrolls. If from here on out we have job growth of 200,000 jobs a month, it'll take more than three years for the economy to regain the employment levels it had before the recession. And that doesn't even account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy we should have more jobs today than we had before the recession.
The unemployment rate is expected to tick up slightly in February, to 9.1 percent from 9 percent in January, most likely because the promise of more job opportunities will lure some discouraged workers back into the labor force.