U.S. job growth likely slowed in February, but the pace probably remained consistent with a healthy labor market despite the coronavirus outbreak, which stoked financial market fears of a recession and prompted an emergency interest rate cut from the Federal Reserve, Reuters informed.
Though the Labor Department’s closely watched monthly employment report on Friday will not fully capture the impact of the coronavirus, which spread in the United States beginning in late February, there are so far no signs that the epidemic has hurt the labor market. Layoffs remain low and small businesses and services sector industries continue to hire at a solid clip.
The Fed on Tuesday slashed its benchmark overnight interest rate by a half percentage point to a target range of 1.00% to 1.25%, in the U.S. central bank’s first emergency rate cut since 2008 at the height of the financial crisis.
Fed Chair Jerome Powell acknowledged the economy’s strong fundamentals, but said “the coronavirus poses evolving risks to economic activity.”
“The job market is the firewall for the economy,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “If we are going to get through this and avoid a recession, the job market can’t show any significant cracks. So far the signs are encouraging.”
According to a Reuters poll of economists, the government’s survey of establishments will probably show nonfarm payrolls increased by 175,000 jobs in February. While that would be a step-down from the 225,000 jobs added in January, the anticipated gains would match the monthly average employment growth in 2019.
The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population. Job growth in January was boosted by unseasonably mild weather, which drove hiring in construction, leisure and hospitality industries. Temperatures were less warm in February.
The government canvassed business in mid-February. At least 11 people have died in the United States from the respiratory disease called COVID-19 caused by the coronavirus and more than 100 have been infected. The deaths and rise in infections were recorded starting the final week of February. Overall, the fast-spreading disease has killed more than 3,000 people and sickened nearly 100,000, mostly in China.
Transportation payrolls could show some impact from the coronavirus in February because of travel restrictions which were enforced by some authorities to curb the spread of the illness. A reduction in employment at ports is also likely amid reports of declines in shipping container volumes.