Getty Images

The U.S. economy is still open for business, with layoffs and unemployment near a 50-year low.

The massive job-producing engine known as the U.S. economy blew a gasket in February, but Wall Street is convinced it was just a temporary failure. Here’s what to watch in Friday’s employment report for March.

Hiring hiatus over

The economy likely added 179,000 new jobs last month, according to economists polled by MarketWatch. An increase of that size or larger would ease a lot of worries after hiring in February slowed to a minuscule 20,000 — the smallest gain in 17 months.

The most closely followed labor-market indicators point to a rebound.

Jobless claims, or layoffs, declined in March and ended at a 50-year low. And a pair of ISM surveys of top manufacturing and service-industry executives showed strong employment levels in March.

More negatively, payroll processor ADP said hiring in March was the weakest in 18 months, but the private sector still added 129,000 new jobs based on its own survey.

The tally of corporate layoffs also rose to an 10-year high, according to outplacement firm Challenger, Gary & Christmas.

Neither of those two reports is viewed with high confidence by investors and economists, however.

Unemployment extremely low

The nation’s jobless rate stood at 3.8% in February — close to a 50-year low. Economists predict it will stay below 4% in March.

Millions of Americans have entered or rejoined the labor force because of a record high number of job openings and the fastest increase in wages in a decade.

The influx of people into the labor force has actually prevented the unemployment rate from falling even further. New entrants are initially classified as unemployed until they find a job.

Read: Avocado price spike illustrates danger to U.S. economy of Mexican border closure

Strong hiring paying off

The amount of money workers earn each hour is increasing at the fastest pace in a decade, a sign of just how strong the labor market is.

The yearly increase in hourly wages might drop off slightly form a 10-year high of 3.4% in February, but not by much. Many companies complain that one of their biggest problems is finding skilled workers.

“Labor is tight and in short supply,” a top executive at hotel chain told ISM.

The great outdoors

Employment in the construction industry fell by 31,000 in February — the most in six years — and manufacturers hired the fewest workers since last summer.

Unusually harsh winter weather probably played a role, economists say. They predict a rebound in hiring among the hard-hat industries in March.

Heading into the jobs report, the Dow industrials

DJIA, +0.57%

  has climbed six of the past eight trading days through Thursday. The yield on the 10-year Treasury

TMUBMUSD10Y, -0.29%

 has bounced off the year’s lows, reaching 2.5%.

Source link