WASHINGTON — Can the U.S. economy deliver a third straight month of robust job growth?
The year began with a burst of hiring — 238,000 jobs added in January and 235,000 in February, along with solid pay growth. It all added up to a picture of confident employers and ample opportunities for job applicants with the right qualifications.
The question now is whether businesses extended that streak or held back a bit on hiring in March. Economists have forecast that employers added a decent if less-than-spectacular 180,000 jobs last month and that the unemployment rate remained at a low 4.7 percent.
The Labor Department will release the March jobs report at 8:30 a.m. Eastern time Friday.
The economy appears to have slowed in the first three months of the year, though most economists expect a rebound in the current April-June quarter. A strong March job gain would bolster those hopes.
Consumer and business sentiment has soared since the November presidential election, but the increased optimism hasn’t yet accelerated growth. Consumers actually slowed their spending in January and February, when adjusted for inflation. Any such pullback tends to exert a drag because consumers account for about 70 percent of the economy.
Businesses have been ordering more high-cost manufactured good since fall, a reflection of stepped-up investment. But those orders slipped in February and remain below levels of a year ago.
Still, some areas of the economy are humming: Developers are building more homes, with construction starts up 7.5 percent in January and February compared with a year earlier. And home sales reached their highest level in a decade in January before slipping a bit in February.
What’s more, for the first time in years, overseas growth stands to boost the U.S. economy. Germany’s factories enjoyed a surge in orders in February. The rest of Europe, as well as Japan, is reporting faster growth, and China is stabilizing after fears about its outsize debts roiled markets last year.
Here are five things to look for in Friday’s jobs report:
IS VIGOROUS HIRING BEING SUSTAINED?
March’s jobs data could help address one question: Has hiring noticeably accelerated from last year’s average of about 185,000? Or were the sharp gains in January and February a temporary gift?
Many economists expect hiring to fall back eventually to last year’s pace or even lower as the unemployment rate declines and companies struggle to fill jobs. Yet hiring could remain strong if more Americans come off the sidelines and start looking for work again. The proportion of Americans who are either working or looking for work remains far below pre-recession levels.
ARE MORE PEOPLE LOOKING FOR WORK?
Still, more Americans have returned to the job market in the past 18 months. The proportion of Americans 16 or older either working or looking for work has ticked up to 63 percent from a four-decade low of 62.4 percent in September 2015.
Should that trend continue, it could help sustain brisk job growth. Yet there would also be other, less welcome consequences: More job hunters could mean that employers would face less pressure to raise pay to find workers. That could hold back wage increases and possibly consumer spending, too.
HOW FAST IS PAY RISING?
Average hourly pay rose 2.8 percent in February from 12 months earlier, slightly below a seven-year high of 2.9 percent reached in December. Still, that’s much higher than the meager raises workers received for most of the economic recovery.
Many economists forecast that pay rose in March at roughly the same pace from a year earlier. A faster increase could spook policymakers at the Federal Reserve, because companies typically seek to offset higher pay by raising prices. Inflation topped the Fed’s target of 2 percent in February for the first time in five years. Faster pay gains could lead the Fed to raise short-term interest rates more quickly.
HOW’S THE WEATHER?
The weather might have restrained hiring in March for two reasons. First, unseasonably high temperatures in January and February goosed construction hiring: Building sites remained open, rather than having to close because of snow. Construction companies added 98,00 jobs in those two months, more than double the pace in the same two months last year.
That could mean that builders now won’t need to add jobs as they traditionally do during spring, which could restrain job growth in March or future months. Separately, last month’s snowstorms in the Northeast and Midwest might have kept some employees of retail, construction and other industries at home.
WILL GOVERNMENT PAYROLLS FALL?
President Donald Trump has imposed a hiring freeze on federal agencies, which many economists expect will cause job losses as workers who leave aren’t replaced. Yet so far, the government is still showing small gains: The federal government added 2,000 workers in February and 4,000 in January.