WASHINGTON, D.C. – The U.S. economy likely added jobs at a solid pace in February before an escalation of the coronavirus outbreak disrupted factory supply chains, slowed business travel and heightened economic fears.
Economists estimate that employers added 170,000 jobs and that the unemployment rate held at a very low 3.6%, according to data provider FactSet. The government will release its report Friday at 8:30 a.m. Eastern time.
The forecast suggests that the viral outbreak has yet to produce a measurable impact on the job market. The data for Friday's jobs report was gathered mainly in the second week of February, before the virus began to spread through the United States.
Most economists expect some slowdown in hiring in the coming months. If employers were to start slashing jobs, it could significantly escalate the economic damage. For that reason, a range of job market barometers will provide some of the most vital signals about how the economy is withstanding the virus' impact.
Widespread layoffs can transform slowdowns in just one or two sectors — the travel industry, say, or manufacturing — into a full-blown downturn for the overall economy. When workers lose jobs and pay, they typically cut spending. Their friends and relatives who are still employed grow anxious about their own jobs and wary of spending freely, a cycle that can trigger further job cuts.
Layoffs “tend to build on each other,” said Tara Sinclair, an economist at the jobs website Indeed. “That spiral is really what we're worried about happening.”
So long as monthly job gains remain above 100,000 or so, the unemployment rate should stay low and the economy will avoid a downturn, Mark Zandi, chief economist at Moody's Analytics, said. If the monthly pace were to sink below that level for a sustained period, the unemployment rate would likely rise.
“Once the unemployment rate notches higher, that's when a recession becomes a real threat," Zandi said.