Forecasting the pace of the recovery has been tough, and many economists have got their predictions very wrong over the past two years. For the February jobs report set to be released on Friday, experts say they are expecting robust job growth. But what if they got it wrong yet again?
Last month, the nation saw the light at the end of the tunnel of the Omicron wave. Infections fell swiftly and various cities announced changes to their pandemic restrictions. That should have been good news for jobs. Consequently, economists polled by Refinitiv believe 400,000 positions were added last month. In pre-pandemic times, that would be a fantastic number. But the labor market is still making up for lost ground. If the consensus forecast holds true, it would make February the weakest month of job growth since April last year. Forecasters also predict that the unemployment rate will inch down to 3.9%, matching the pandemic-era low from December, and down from 4% in January. Getting the forecast right But there’s reason to be skeptical. Over the course of the pandemic, it has been very hard for economists to accurately forecast the month-to-month changes. The 400,000 prediction for Friday is a consensus of a wide range of estimates that includes Deutsche Bank ( DB) ‘s estimate of only 200,000 jobs, as well as Morgan Stanley ( AANXX) ‘s expectations of 730,000 jobs. At the start of 2022, jobs forecasts missed the mark spectacularly as the labor market did much better than expected: While some economists had predicted a negative jobs number for January, America ended up adding 467,000 positions, blowing the consensus of 150,000 jobs out of the water.
