WASHINGTON (AP) — In advance of the February jobs report being released Friday, the U.S. economy has been skating on an icy patch.
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 slid as key economic sectors surrendered to a harsh winter. And the economy entered 2014 with less momentum than initially thought.
All of which magnifies the importance of Friday's jobs report. The Labor Department data could help confirm the belief that nasty weather froze much of the job market last month — and that spring should bring a bounce back. The February jobs report could also expose some of the frailties of a still-sluggish economic recovery that's almost a half-decade old.
Economists predict that employers added 145,000 jobs in February and that the unemployment rate remained 6.6 percent, according to a survey by FactSet.
Here are five vital signs that help capture the state of the job market to date:
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 Great 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, because layoffs would rise if employers expected business to weaken.
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. A third straight tepid month would be deflating. For February, economists predict that 145,000 jobs were added, according to a survey by FactSet.
Still, the economy has endured cold streaks before 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. Once people without a job stop looking for one, they're no longer counted as unemployed. When fewer people are counted as unemployed, the rate will fall.