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player ready...THE HIRING WATCH
`A glaring hole’
For months, economists have pointed to various indicators suggesting employment is rebounding only to see their optimism dashed by the monthly payroll report.
As a result, the jobs question has taken center stage among the aspirants for the presidential nomination. And politicians from both political parties will be watching Friday’s February employment report with special interest.
“It has taken on a new dimension of importance because all other economic indicators have been doing well,” said Chicago economist Carl Tannenbaum. “It has been a glaring hole in our economic survey.”
Last week, another report, the Chicago purchasing managers’ index, appeared to indicate that Friday’s report could finally be the pleasant surprise everyone has been waiting for. The jobs component of the purchasing managers index unexpectedly surged to the best level since 1988, rising to 54.8 from 48.3.
“It is very encouraging,” said Tannenbaum, the chief economist of LaSalle National Bank. “But we have had a lot of encouraging signs for the past few months.”
Tannenbaum and other economists probably won’t be seeing the hard numbers they’re looking for in the February report, according to Tim O’Neill, chief economist of BMO Financial Group and Harris Bank.
“We’re looking at something in the range of 140,000 new jobs to 150,000 new jobs,” he said, noting that would be a modest improvement over the January report, which showed 112,000 new jobs were created while the unemployment rate dropped to 5.6 percent.
But, O’Neill said, “all the signs are really pointing to a pretty solid and really strong recovery. Eventually, it has to show up in the job market.”
MANUFACTURING
Spending picks up
Momentum is a good thing. That’s what seems to be taking hold in manufacturing.
Last week’s upward revision in the fourth-quarter gross domestic product, to 4.1 percent from 4 percent, indicates a strengthening manufacturing sector.
Monday’s report on February manufacturing should be strong again, according to Chicago economist Robert Dederick. Although he said the index should fall to 61.5 from January’s 63.6, a figure above 50 indicates the sector is expanding.
“Manufacturers are showing increasing willingness to spend on capital goods and inventories,” said Dederick, of RGD Economics.
CAR SALES
In gear again
A raft of other reports is scheduled to be released this week. January construction spending and personal income and spending are due Monday. February auto sales are scheduled for Tuesday. The Federal Reserve beige book is due Wednesday, along with the February non-manufacturing report. Chain store sales for February and January factory orders should be out Thursday.
Of the group, watch for the car and truck sales. After falling to an annualized rate of 13.2 million units in January, most economists are expecting to see a rebound to about 13.5 million units.
EQUITIES
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The appeal of profits
It was another ho-hum month on Wall Street as the stock market finished without a sharp rise or loss.
“The consolidation that began late last year continues with this choppy market,” said Marshall Front, of Front Barnett Associates, who said corporate America is continuing to post better profits than Wall Street has anticipated.