US job growth seen strong in February

US employers likely maintained a brisk pace of hiring in February and boosted wages for workers, which is expected to give the Federal Reserve the green light to raise interest rates next week despite slowing economic growth.
Non-farm payrolls probably increased by 190,000 jobs last month, according to a Reuters survey of economists, in part as unseasonably mild weather buoyed employment in the construction sector. The economy created 227,000 jobs in January.
The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.
“February employment appears to be the final hurdle for the Fed to raise interest rates in March, and it’s likely to be easily jumped,” said Ryan Sweet, senior economist at Moody’s Analytics in Westchester, Pennsylvania.
Payrolls could, however, surprise on the upside after the ADP National Employment Report showed on Wednesday that private sector employers hired 298,000 workers in February, the largest amount in a year.
Last month’s brisk clip of hiring is expected to have been accompanied by an acceleration in wage growth, with average hourly earnings seen rising 0.3 percent in February after January’s paltry 0.1 percent gain. That would lift the year-on-year increase in wages to 2.8 percent from 2.5 percent in January.
The unemployment rate is seen declining one-tenth of a percentage point to 4.7 percent in February, even as more people likely entered the labor market, encouraged by the hiring spree. With the labor market near full employment, wage growth could speed up as companies are forced to raise compensation to retain employees and attract skilled workers.
According to economists, a growth rate of between 3 and 3.5 percent in wages is needed to lift inflation to the Fed’s 2 percent target. But inflation is already firming, in part as commodity prices rise.

Source: Arab News