Explaining Southern California's economy

February jobs report: Better than January?

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

The Bureau of Labor Statistics (BLS) will release its February jobs report on Friday. The January report was better than expected, with the country adding 243,000 jobs and the unemployment rate falling to 8.3 percent. The big question for February is, "Will the improving trend continue?"

Chances are good. The ADP report — which hasn't been all that reliable a predictor of the BLS data of late — came out today and said that the economy had added 216,000 new jobs, barely beating the Bloomberg consensus, which expects a nearly identical 215,000. 

Meanwhile, Business Insider engaged in a very elaborate piece of analysis and came up with — wait for it — 285,000! That would be, as BI notes, the best monthly jobs report in six years. I like that BI zeroes in on auto sales as a key predictor. February saw sales rise to a 15-million annual pace, more than two million better than 2011. 

I'd rather look at GDP. In the fourth quarter, U.S. GDP growth — a broad measure of how the economy is doing — was 3 percent, which surprised many economists. If the economy is capable of growing at 3 percent in the first quarter of 2012, that 285,000 number may not be far off the mark. That said, some bearish analysts are calling for a number well below 200,000 for February. 

I believe GDP is growing at a brisker pace than some of the more conservative economists think. Not at 4-5 percent, but probably somewhere around 3 percent. Basically, we're getting the kind of growth we thought we would get early last year but saw derailed. The Federal Reserve's latest Beige Book — a snapshot of the national economy, broken down by region and sector — indicates a sustainable pattern of moderate growth, not retreat from 3 percent to 2 or 2.5 percent.

So I'm not sure if we'll get 285,000, but I do think we'll beat January's 243,000, and possibly shave another tenth of a point or two off that 8.3 percent unemployment level, putting 7 percent in the economy's sights, maybe by fall. Anyway, if the BLS number does come in at or above the January level, the markets will probably rebound on the news and shrug off worries about China's slowing growth rate and the potential for a Greek debt default. Both of those concerns account for the retreat from Dow 13,000 that we saw last week and early this week.

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