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Solid Month of Feb Job Gains Expected  03/06 06:24

   U.S. employers are expected to follow the best three-month burst of hiring 
in 17 years with another solid round of job gains in February.

   WASHINGTON (AP) -- U.S. employers are expected to follow the best 
three-month burst of hiring in 17 years with another solid round of job gains 
in February.

   Still, the result is unlikely to match the furious pace of November through 
January, when 1 million positions were added. Economic growth probably isn't 
fast enough to sustain such a large gain. And harsh winter weather might have 
discouraged some hiring.

   Economists have forecast a job gain of 240,000 and a drop in unemployment to 
a near-normal 5.6 percent from 5.7 percent, according to the data firm FactSet. 
That would be evidence of a job market that continues to outshine others around 
the world.

   The February jobs report will be released at 8:30 a.m. Eastern time.

   "People are pretty optimistic about the U.S. economy, and they're hiring," 
said Frank Friedman, interim CEO of Deloitte, the consulting firm that counts 
80 percent of the Fortune 500 as clients.

   A bright outlook among employers has translated into a robust average of 
267,000 jobs added monthly over the past 12 months. That means there are 3.2 
million more Americans earning paychecks now than at the start of 2014. That 
additional income, along with sharply lower gas prices, has left more Americans 
able to spend.

   The steady hiring may also finally be forcing wages up. Average hourly 
earnings rose 0.5 percent in January, the most in six years. Economists did 
caution against reading too much into one month's figure. Most expect a more 
modest average wage gain in February.

   Friday's jobs report will come less than two weeks before the next policy 
meeting of the Federal Reserve, which is considering when to raise interest 
rates from record lows. Tim Hopper, chief economist at TIAA-CREF, suggested 
that the strengthening job market and tentative signs of pay increases give the 
Fed room to move toward raising short-term rates.

   Most analysts expect the Fed to pave the way for higher rates by adjusting 
the statement it issues after its March meeting, to be followed by the first 
hike in June or September.

   It may turn out that some temporary factors held back job growth in 
February. Snow and ice storms in the Midwest and parts of the Southeast closed 
some businesses and possibly delayed hiring. Boston and other parts of the 
Northeast have been hit by enormous snowfalls.

   Investment bank UBS estimates that such factors lowered February's job gain 
by 25,000. Construction companies, auto dealers, and retailers are the sectors 
most likely to have been affected by winter storms and unseasonably cold 
weather.

   Several industries may also be hiring less than in recent months or even 
cutting back. Oil and gas drilling companies have cut jobs in response to the 
60 percent drop in oil prices since summer. Applications for unemployment aid 
have risen in such oil-heavy states as Texas, Oklahoma and North Dakota.

   In January, retailers reported a sizable job gain, which most economists 
don't think is sustainable.

   Manufacturers may also have pulled back in the face of weaker growth 
overseas. A survey of manufacturing firms shows that export orders have shrunk 
for two months. The U.S. dollar has also soared in value compared with the euro 
and Japan's yen, thereby squeezing profits for American multinationals that 
operate overseas.

   Yet the U.S. job market and economy, for all their obstacles, are still 
outdoing those of other major nations. Though Europe and Japan are showing 
signs of growing more than last year, their economies remain feeble. The euro 
currency union's unemployment rate has started to fall, but at 11.2 percent it 
remains nearly twice the U.S. level.

   The U.S. economy expanded at a breakneck annual pace of 4.8 percent in last 
year's spring and summer, only to slow to a tepid 2.2 percent rate in the final 
three months of 2014. Many economists estimate that growth is picking up 
slightly in the current quarter to an annual rate of 2.5 percent to nearly 3 
percent.

   Still, economists remain bullish about hiring despite the slowdown in 
growth. The fourth quarter's slowdown occurred largely because companies 
reduced their stockpiles of goods, which translated into lower factory output.

   But companies focus more on consumer demand in making hiring decisions, and 
demand was strong in the October-December quarter. Americans stepped up their 
spending by the most in four years.

   And though consumers are saving much of the cash they have from cheaper gas, 
spending in January still rose at a decent pace after adjusting for lower 
prices.

   Mark Zandi, chief economist at Moody's Analytics, expects the economy to 
grow 3 percent this year, which would be first time it's reached that level in 
a decade. That's fast enough to support hiring of about 250,000 a month, he 
said.


(KA)


 
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