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Livesquawk - US Job Growth Likely As States Lift Covid Restrictions
US Job Growth Likely As States Lift Covid Restrictions

- Non-farm payrolls forecast at 180k (prev 49k)

- Jobless rate seen steady at 6.3%

- Texas, Mississippi business to open completely

- Data release set for Friday at 13:30 GMT

 

By Eric Culp

European Editor

LiveSquawk News

@EricCulpLS

 

3 March 2021 | 23:05 GMT

 

 

The labour market in the world’s largest economy is poised to exhibit renewed strength on Friday as more American states lift pandemic restrictions on businesses.

 

February’s non-farm payrolls are expected to show a jump of 180,000 versus the 49,000 increase in January, according to an economists’ poll. The unemployment rate likely held steady at 6.3% last month, the poll predicted.

 

“We expect positive employment growth but not a significant rebound, so overall employment will remain subdued,” Danske Bank said. “Restrictions have been eased gradually but the pandemic is not over.”

 

Private payrolls in the US increased by 117,000 in February, ADP reported Wednesday, a number that was well short of analysts' expectations of a rise of more than 200,000.  

 

ING said the end of California’s stay-at-home order in late January could support the headline non-farm payrolls number beyond market expectations with growth as high as 200,000 “With thousands of businesses allowed to reopen or operate at a higher capacity in the US’s most populous state, this should translate into some decent job creation, although it may be more reflected in the March report given the data collection cut-off point was the week of 12 February.”

 

But the return of Golden State businesses may not help the jobless rate, which could even record an increase, ING noted. “It is calculated from a different survey, and there is scope for a partial replacement after a surprisingly large 0.4 percentage point drop to 6.3% in January when the economy created just 49k jobs.”

 

More states end pandemic measures

 

Looking ahead, further US states are allowing for expanded commerce despite ongoing concerns about the coronavirus. Governor Greg Abbot of Texas, America’s second most populous state, said Tuesday that he is lifting all restrictions on businesses, and Mississippi announced a similar move on the same day.

 

TD Securities said, “The payrolls data have been much weaker than the spending and survey data over the last two months, but the February report will probably show momentum starting to pick up again. More improvement is likely as Covid restrictions are eased further.” The US durable goods report also surprised to the upside in January (read our coverage here).

 

However, the US economy, much like many of the people who have survived the virus, could be suffering from its effects over the long haul. “Full recovery will likely take a while; payrolls are down by 9.9mln since last February,” TD said.