|
 Nonfarm payrolls probably increased by 190,000 jobs last month,
according to a Reuters survey of economists.
Though that would be a sharp step-down from the 292,000 jobs created
in December and the average 284,000 positions per month in the
fourth quarter, it would largely reflect payback after the warmest
temperatures in years bolstered hiring in weather-sensitive sectors
like construction.
January employment will also lose the lift from the hiring of
couriers and messengers, which was buoyed in November and December
by strong online holiday sales.
"Payroll growth has been running above trend over the past three
months," said Dana Saporta, an economist at Credit Suisse in New
York. "It's reasonable to expect a slower pace of payroll growth in
the January data. Anything close to forecast will provide further
evidence the labor market is still very strong."
But coming in the wake of an abrupt slowdown in economic growth in
the fourth quarter and a sharp stock market sell-off, the Labor
Department's closely watched employment report could add to concerns
the U.S. economic outlook was deteriorating.
The data will be released on Friday at 0830 a.m (1330 GMT).
Despite the expected slowdown in job growth, the unemployment rate
was forecast holding steady at a 7-1/2-year low of 5 percent for a
fourth straight month. Federal Reserve Chair Janet Yellen has said
the economy needs to create just under 100,000 jobs a month to keep
up with growth in the working age population.
Against the backdrop of tightening financial market conditions, a
deceleration in employment growth would further undercut the case
for a Fed interest rate hike in March. The U.S. central bank raised
its short-term interest rate in December for the first time in
nearly a decade.
"We should recognize that the fourth quarter (job growth) was
bloated by favorable weather conditions and January was not," said
Ray Stone, an economist at Stone & McCarthy Research Associates in
Princeton, New Jersey.
"If I were on the Federal Reserve's policy committee, it would not
really change my mind. Markets have been turbulent, financial
conditions are less accommodative now ... I may be less inclined to
tighten now that I was in December."
FULL EMPLOYMENT
The economy grew at a 0.7 percent annual rate in the fourth quarter,
restrained by headwinds that included a strong dollar and efforts by
businesses to sell off inventory.
Even with slower job growth, wages are expected to rebound after
holding steady in December. Average hourly earnings are forecast
increasing 0.3 percent.
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Nonetheless, the year-on-year gain in earnings is expected to drop
to about 2.3 percent from 2.5 percent in December as the unusually
strong wage gains seen in January 2014 drop out of the picture. But
with the jobless rate in a range most economists associate with full
employment, wage growth is expected to pick-up this year.
With its January employment report, the government will publish its
annual "benchmark" revisions and update the formulas it uses to
smooth the data for regular seasonal fluctuations. It will also
incorporate new population estimates.
In an early benchmark estimate last year, it said the level of
employment in March of last year was likely 208,000 lower than it
had reported. The shift in population controls will mean figures on
the labor force or number of employed or unemployed in January will
not be directly comparable to December.
The labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job is near
four-decade lows. Low participation could crimp job growth as the
supply of labor shrinks, unless a significant rise in wages lures
more people back into the labor force.
In January, employment gains were likely concentrated in the
services sector, with mining probably losing more jobs and
manufacturing reversing some of December's gains.
Mining payrolls fell 129,000 in 2015 and the sector has lost about
half of the jobs that were added in the prior five years.
Further losses are likely after a report on Thursday showed energy
firms in January announced plans to lay off 20,246 workers. Oil
prices have plunged about 70 percent in the last 18 months, forcing
firms like oilfield services provider Schlumberger <SLB.N> to slash
their workforce.
Construction payrolls growth likely cooled after increasing by
128,000 jobs in the fourth quarter. Courier services hiring also
probably slowed. Retail employment likely remained modest and could
weaken in months ahead after a number of retailers, including
Walmart announced dozens of store closures.
(Reporting by Lucia Mutikani; Editing by Tim Ahmann and David
Gregorio)
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