Economists are keeping a close eye on wages, as inflation is running hot and is expected to go even higher with the recent jump in oil prices after Russia's Ukraine invasion. The consumer price index jumped 7.5% on a year-over-year basis in January and is expected to be even higher in February when it is released next week.
But rising wages are a driver of economic growth since they can support the consumer. Michael Gapen, chief U.S. economist at Barclays, said he had expected to see households pulling funds from savings this quarter to support consumption, but rising wages could reduce the hit to savings. Economists said job growth was likely to come from a broad range of industries. There were expected to be gains in leisure and hospitality.
Tom Simons, money market economist at Jefferies, said the labor market continues to be plagued by a shortage of supply.