Jobs report to provide first measure of Biden economy

The first monthly jobs report covering the Biden presidency will be released Friday morning as congressional Democrats race to pass a massive economic relief package.

Economists expect the February jobs report to show a modest rebound in hiring as progress against COVID-19 boosted confidence in a quicker end to the pandemic. Analysts estimate that U.S. employers added 180,000 jobs last month — a pace that’s not nearly fast enough to quickly fill the hole left by COVID-19, but better than January’s meager addition of 49,000 jobs.

“The scope for a brisk acceleration is clear, though we expect the biggest gains to come later in the spring as the reopening broadens,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a Thursday preview.

The world’s largest economy remains 10 million jobs short of its pre-pandemic employment level, 18 million Americans are on some form of jobless aid, and the spread of new coronavirus variants is threatening to delay a return to normal life.

While economists disagree over how much aid the economy still needs, the February jobs report is not expected to upend that debate.

Julia Pollak, a labor economist at job recruitment website ZipRecruiter, said a tepid level of new positions advertised in January and a disappointing ADP private payrolls report from Wednesday indicates February’s overall gain will likely be modest.

“Typically, increases in job postings one month are a very strong predictor of increases in employment in the following month,” she said. “What we saw in January would suggest that the February numbers will be pretty low.”

Most of February gains are expected to come in industries that have managed to flourish during the pandemic, such as online retail, food delivery, warehousing and transportation. Economists are also projecting increases in manufacturing and construction, but largely due to seasonal adjustment factors.

“Manufacturing employment growth appears to have strengthened in February with relatively broad-based improvement across most manufacturing business survey employment indices. However, we expect some risk from reduced auto production due to supply chain issues,” wrote economists at investment bank Nomura in a preview of Friday’s report from the Labor Department.

Another underwhelming jobs report could help Biden and Democratic lawmakers as they argue in favor of another major economic relief plan. While the scope of the bill has been largely cemented, Democrats now face a test of unity amid a time crunch to pass the $1.9 trillion measure before expanded unemployment benefits expire on March 14.

“The Senate is going to move forward with the bill. No matter how long it takes, the Senate is going to stay in session to finish the bill this week,” Senate Majority Leader Charles Schumer (D-N.Y.) said from the Senate floor on Thursday ahead of a vote to begin debate on the bill.

Republicans are almost unanimously united against the Democratic relief measure, citing concerns that it could overheat the economy. The Biden administration and Federal Reserve have been batting down rising concerns over inflation on Wall Street, where Treasury yields have risen and high-flying technology stocks have cratered.

Even so, February’s jobs report may be the last look into the labor market before a stronger recovery begins in earnest.

Pollak said job postings on ZipRecruiter “skyrocketed” in February, potentially laying the groundwork for a hiring surge in March.

“We really are seeing a turning point in February,” Pollak said, attributing the surge in job postings to a 5.3-percent jump in retail sales in January driven by the second round of stimulus checks.

“That, more than anything, is what caused businesses to start expanding capacity again and to plan to start hiring more again,” she added. 

Another round of federal aid could give the economy another boost heading into spring, fueling hopes that an increasingly inoculated population could get back on track after a year of devastation.

Biden’s announcement this week that the U.S. will have enough COVID-19 vaccine doses for every adult by May could also prompt businesses to staff up for the post-pandemic economy.

But Pollak cautioned that with roughly three job-seekers for every open job, a full recovery from the coronavirus recession is far away. Still, she said the expedient approval of more federal funding for vaccination efforts, a provision of Biden’s relief plan, could bring the U.S. closer to the light at the end of the tunnel.

“The social benefit of vaccinating people right now is massively, massively higher because of all the deaths you avoid, because of all the deferred economic activity you avoid,” she said.

“Any delays to COVID relief that could be speeding up vaccination now actually is much, much more costly than it seems to be on paper.”