New filings for unemployment benefits unexpectedly rose last week, reaching the highest level since last May. Is this an early warning sign of trouble for the labor market and, by extension, the economy? No, not yet. It could be nothing more than weather-related turbulence courtesy of a harsh winter. But if this leading indicator continues to rise in the weeks ahead, we’ll have a signal that’s not so easily dismissed. For now, the recent changes are still within the band of “normal” fluctuations that are linked with a healthy degree of forward macro momentum. The margin of comfort, however, is wearing thin and so the next several reports could prove to be decisive, for good or ill.
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Private nonfarm payrolls in the US are projected to increase by 230,000 (seasonally adjusted) in tomorrow’s February update from the Labor Department, based on The Capital Spectator’s median point forecast for several econometric estimates. The monthly prediction reflects a substantial deceleration in growth vs. January’s 267,000 gain.
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What should we expect for tomorrow’s February payrolls report from the US Labor Department? As usual, ADP’s estimate of job creation in the private sector offers a valuable clue. The current forecast based on yesterday’s update: government data will continue to show private payrolls rising above the 200,000 mark for last month, but at a substantially lower increase vs. January’s gain.
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● US private sector adds jobs in February, but growth slows: ADP | Reuters
● Faster Services Growth in U.S. Points to Resilience | Bloomberg
● Fed’s Beige Book: US Economic Recovery Continues Despite Trouble Spots | RTT
● Eurozone retail PMI points to further drop in sales | Markit
● PMI: Global economic growth accelerates to 5-month high | Markit
● German Factory Orders Fall Most Since August | RTT