U.S. workers have been largely insulated from a global slowdown. Job growth remains steady and wages are finally picking up — trends that will be put to the test in Friday’s employment report for February.
Economists have forecast that employers added a solid 195,000 jobs last month, up from the 151,000 added in January, according to data firm FactSet. And the unemployment rate is expected to remain at a low 4.9 percent.
Hiring by construction companies, retailers and health-care providers have offset layoffs at manufacturers and fossil fuel companies — two sectors squeezed by the pressures of uncertainty in China, sluggishness in Europe, declining oil prices and a stronger dollar.
Consumers have provided the foundation for much of the job market’s improvement in what’s become something of a self-sustaining cycle. The 2.7 million workers hired in the past 12 months have bolstered spending on autos, housing and meals out. As unemployment has dropped, more companies have begun to raise pay to attract workers, thereby fueling more hiring as people’s ability to spend, invest and save has increased.
Friday’s jobs report will be closely monitored by the Federal Reserve and presidential candidates as a key gauge of whether the economy is extending its 6½-year rebound from the Great Recession. Recent reports point to continued improvement.
Over the past 12 months, average hourly earnings have risen 2.5 percent. Annual pay growth has perked up after having increased at a roughly 2 percent pace in the previous few years. The wage acceleration has prompted optimism among many economists despite the difficulties worldwide.
“The trend of wage growth is clearly a straight line upward — I believe we will hit the 3 percent threshold,” said Andrew Chamberlain, chief economist at Glassdoor, a jobs marketplace.
The hiring and rising incomes have translated into more consumer spending in several key sectors.
Auto sales rose 7 percent over last February to 1.3 million vehicles, according to Autodata Corp.
Purchases of existing homes rose 0.4 percent last month to a seasonally adjusted annual rate of 5.47 million, according to the National Association of Realtors. That improvement followed a solid 2015, when sales achieved their highest level in nine years.
And spending at restaurants has risen 6.1 percent over the past 12 months.
Still, troubles abroad have tempered U.S. economic growth.
China, the world’s second-largest economy, is struggling with high corporate debts and slower growth. Oil prices have tumbled amid relatively low demand. The strong dollar has crushed exports, while the stock market has dropped in an extended bout of volatility this year.
Mining companies, including oil and gas drillers, have shed 130,600 jobs in the past 12 months. Factories have hired just 45,000 workers from a year ago as job gains in the manufacturing sector have slowed after a strong 2014.
The Fed is looking for further wage growth. The central bank is considering whether to raise interest rates again in the face of global risks that could imperil broader economic growth. In December, the Fed raised rates from record lows — its first increase in nearly a decade.
Investors have largely dismissed the likelihood of another rate hike at the upcoming Fed meeting March 16-17.