On February Jobs Data, It’s Anybody’s Guess

Buckle your seatbelts.

With the Labor Department set to report the latest jobs data for February at 8:30 a.m. Friday, the figures for payroll gains and unemployment are especially hard to predict this time. Seasonal factors like the weather, as well as conflicting signals from private payroll surveys, have added to the uncertainty.

And with the last two monthly reports - for January and December - both coming in well below expectations, economists are eager to see whether that shortfall was a weather-related anomaly or a sign that underlying momentum in the economy is weakening.

“We are braced for just about anything tomorrow,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said on Thursday in a note to clients. “Mixed payroll signals and unpredictable seasonals make tomorrow’s number a very tough call.”

The consensus among economists on Wall Street looks for employers to have added 149,000 positions in February, with the jobless rate flat at 6.6 percent.

At that rate, jobs gains would be running just a hair above the 154,000 average increase over the last three months, but well below the 187,000 gain from the past 12 months.

In December, the economy added 75,000 jobs, and in January, it created 113,000 positions. Both of those numbers are subject to revision on Friday.

Earlier this week, a private survey by ADP suggested healthier growth, but the Institute for Supply Management’s nonmanufacturing survey augured weakness. New weekly jobless claims reported by the Labor Department on Thursday were more encouraging.

For his part, Mr. Shepherdson is looking for a gain of 175,000 jobs in February, adding “we would be equally surprised by numbers 50,000 on either side, but we suspect investors are now biased to the downside.”

Bank of America Merrill Lynch is more pessimistic, looking for a gain of 115,000 jobs, with the unemployment rate stable at 6.6 percent.

In particular, economists at Bank of America Merrill Lynch are watching for construction and manufacturing hiring to decline, following a rebound in January. Retail hiring will also prove sluggish, they predict, with weather and higher heating costs inhibiting consumers.

“A big wild card is private health care jobs, which have been particularly weak the past two months â€" it will be interesting to see if there is persistent weakness or a snap back,” the bank noted.

Mr. Shepherdson said that seasonal adjustments and other statistical quirks could have an especially large impact. That was one reason for January’s big shortfall in job creation.

“I’ve been bombarded by questions by clients, and there is a gigantic amount confusion over seasonal adjustments,” Mr. Shepherdson said.

For example, seasonal adjustments by Labor Department statisticians, which in the case of January are supposed to compensate for temporary factors like layoffs after the Christmas season, depressed the payroll figure by 79,000 more in January 2014 than in the preceding January.

“Seasonal adjustments are quirky, and it’s basically a black box,” Mr. Shepherdson added.