WASHINGTON – The U.S. economy has been skating on an icy patch in advance of the February jobs report being released today.
Hiring skidded in December and January to roughly half its average monthly pace of last year. Auto buying, existing-home sales and factory orders have slipped as key economic sectors surrendered to a harsh winter. And the economy entered 2014 with less momentum than initially thought.
The February jobs report also might expose some of the frailties of a still-sluggish economic recovery that’s almost a half-decade old.
Here are some vital signs that help capture the state of the job market to date:
Layoffs. Evidence emerged Thursday that the economy should thaw once the weather does: 323,000 people applied for unemployment benefits last week, the Labor Department said. That might sound like a lot. But it’s no more than the number who typically sought benefits before the recession erupted at the end of 2007. Applications for benefits essentially reflect layoffs. And their low current levels suggest that companies foresee stronger consumer demand ahead.
Hiring. It’s heartening when few people are being laid off. But the other side of the equation is actual hiring. And employers haven’t been filling many jobs. The nation’s monthly job growth averaged a seasonally adjusted 94,000 in December and January. That was far below last year’s average monthly gain of 194,000.
Still, the economy has endured other cold streaks during the recovery. It averaged fewer than 71,000 added jobs a month between December 2010 and January 2011. It averaged 99,000 for two months in mid-2012. The question is whether job growth for the rest of 2014 can elevate the pace of hiring to at least last year’s average.
Unemployment rate. At 6.6 percent, the rate is the lowest it’s been in more than five years. That should be cause for celebration. The Federal Reserve had once said the economy might be weaned off its stimulus of near-zero short-term interest rates once unemployment fell to 6.5 percent. At that point, the gravitational pull of the recovery was supposed to be enough to propel growth. Not anymore.
What happened? The unemployment rate has become somewhat misleading. That’s because lots of Americans have stopped looking for work in the past few years.
Long-term unemployed. One of the recovery’s frustrating failures has been the inability of people who’ve been out of work for at least six months to find a job. These long-term unemployed number around 3.6 million. Their number has declined by more than 1 million during the past year, but they still account for a high 36 percent of all unemployed Americans.
Employer demand. The monthly jobs report is widely followed. But many economists pay close attention to a more obscure indicator: job openings online. The private Conference Board said this week that advertised openings in February rose 268,100 to 5.19 million. This increase points to pent-up demand for workers, even if recent government data suggests otherwise.