On Friday, the Labor Department will release February employment figures. Since December 2007, the economy has shed 8.4 million jobs. A sharp uptick in employment would indicate the recession is ending, while more job losses would indicate a double-dip recession is more imminent.
In recent weeks, new jobless claims have climbed, fueling pessimism among economists.
The consensus forecast is for payrolls to decrease by about 50,000 and for unemployment to tick up to 9.8% from 9.7%. Factoring in part-time workers who would prefer full-time work and discouraged workers who have quit looking altogether, the unemployment rate is closer to 16.5%.
The ADP private survey of employers for February, released Wednesday, indicated more job losses in February, but ADP forecasts have proven to be only a rough indicator of Labor Department reports.In the employment report, key sectors to watch for signs of economic recovery are manufacturing, construction and retail sales. Recent soundings by the Institute for Supply Management indicate manufacturing is picking up steam and more firms are adding employees than shedding them. In January manufacturers added 11,000, breaking a long losing streak, thanks to a 22,700 pickup in motor vehicles and parts production. Trailing auto sales and troubles at Toyota are expected to dampen gains or push manufacturing employment down going forward. Though industrial production has been rising overall, many gains are in durable goods industries that have learned to make many more goods with fewer workers. Preliminary retail sales are growing at a moderate pace -- perhaps 2% after inflation -- and in January that sector gained 42,100 jobs after losing 18,100 jobs in December. In February, East Coast blizzards likely put a dent in jobs growth that seasonal adjustments will not capture. Hence, an employment gain for February would be very good news, but a moderate decline will not necessarily indicate a great deal about future trends. The $789 billion stimulus package has not been reflected in construction activity and employment statistics. Construction, like manufacturing, has consistently shed jobs during the recession, and lost 75,000 in January.