US jobs growth seen rebounding
Washington, February 7, 2014
US employment likely rebounded in January after being held back by cold weather the prior month, which would offer assurance that economic growth was not faltering.
Nonfarm payrolls are expected to have increased by 185,000 last month, according to a Reuters survey of economists, with the jobless rate seen holding at a five-year low of 6.7 percent. Economists also expect December's paltry count of 74,000 net new jobs, viewed by many as an anomaly, to be raised sharply.
"We are far from having a booming economy, but we are growing increasingly confident that the economy is developing enough internal momentum to reach take-off velocity," said Bill Hampel, chief economist at the Credit Union National Association in Washington.
A report on Monday showing a surprise drop in factory activity to an eight-month low in January spooked investors and fanned fears of a rapid cooling off in growth after the economy's robust performance in the second half of 2013.
But a reading on the dominant services sector on Wednesday showed a fairly strong expansion in activity in January.
The monthly jobs report, always closely watched by financial markets around the globe, will serve as a tie breaker. The Labor Department will release the data at 8:30 a.m.
While economists anticipate the labor market fared much better last month, relentless freezing temperatures present a wild card.
"If we get another low, disappointing number, it will change the short-term economic outlook," said Keith Hall, a senior scholar at Mercatus Center at George Mason University in Arlington, Virginia.
A brightening growth picture encouraged the Federal Reserve last month to move forward with a scaling back of its bond-buying stimulus. Officials at the US central bank will be anxious to see payrolls snapping back from their weather-depressed December level.
While the unemployment rate is forecast holding steady, there is a risk it could decline even further in January because jobless benefits for more than one million long-term unemployed Americans expired at the end of December. If they have since given up the search for work, they would not be considered as being in the labor market and unemployed.-Reuters