Why February jobs report could make your portfolio more appetizing
Finance company executives and managers having a sit-down meal at a restaurant now might be even more enjoyable than for just the delicious dish and social comradery. Their outstanding portfolio might be much more appetizing, too, because of the rebound the job market made in February, aided by what’s cooking in the restaurant sector.
What one expert called “stronger than anticipated,” the U.S. Bureau of Labor Statistics (BLS) reported on Friday morning that total nonfarm payroll employment rose by 379,000 in February. It meant the unemployment rate was little changed at 6.2%.
BLS officials said the labor market continued to reflect the impact of the coronavirus pandemic.
BLS officials also noted most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, health care and social assistance, retail trade and manufacturing. They also noted employment declined in state and local government education, construction and mining.
Moments after the numbers arrived, Curt Long, chief economist and vice president of research at the National Association of Federally-Insured Credit Unions (NAFCU), offered this reaction.
“The February jobs report was stronger than anticipated, thanks to a spike in restaurant employment,” Long said. “Private payrolls grew by 465,000, and restaurants accounted for over 60% of that total.
“With vaccine distribution continuing to accelerate and with the economy in the initial stages of a reopening, the coming months should see robust gains,” Long added.
The newest BLS data arrived after the Conference Board Consumer Confidence Index improved again in February. The index currently stands at 91.3, up from 88.9 in January.
The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — climbed from 85.5 to 92.0.
However, the Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — fell marginally from 91.2 in January to 90.8 in February.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for the Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was Feb. 11.
Officials said the survey results did not fully capture the events surrounding the Texas power crisis nor the loosening of dining restrictions in New York City.
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, senior director of economic indicators at the Conference Board. “This course reversal suggests economic growth has not slowed further.
“While the Expectations Index fell marginally in February, consumers remain cautiously optimistic, on the whole, about the outlook for the coming months. Notably, vacation intentions — particularly, plans to travel outside the U.S. and via air — saw an uptick and are poised to improve further as vaccination efforts expand,” Franco continued in another news release.
Consumers’ assessment of current conditions also improved in February, according to the Conference Board.
The percentage of consumers claiming business conditions are “good” increased from 15.8% to 16.5%, while the proportion claiming business conditions are “bad” fell from 42.4% to 39.9%.
Experts added that consumers’ assessment of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 20.0% to 21.9%, while those claiming jobs are “hard to get” declined from 22.5% to 21.2%.
All of that positive momentum could help the health of your outstanding portfolio, as this week Experian reported total open automotive finance balances grew 2.8% year-over-year, reaching $1.27 trillion during the fourth quarter.