the deep drop in omicron cases in february gave businesses the green light to hire and more people who got sick returned to work so wall street is expecting a sturdy increase in us employment here is what to watch in the labor department’s jobs report on friday economists polled by the wall street journal predict the us added 440000 new jobs in february that would be similar to a 467000 increase in january leisure and hospitality businesses such as hotels and restaurants probably added the most new jobs the receding pandemic is expected to spur people to spend more on services such as inperson shopping travel and dining out last year the us created an average of 555000 new jobs a month the official jobless rate is seen slipping to 39 from 4 matching a pandemic low unemployment had fallen to a 50year low of 35 in early 2020 shortly before the pandemic but the labor market is far different now the number of people working still hasn’t returned to precrisis levels for one thing and many may not return to the labor market anytime soon if at all the result the biggest labor shortage is modern times the labor shortage has given employees the most leverage over employers in decades millions of people have switched jobs and gotten higher pay and companies worried about losing more workers are increasing wages and benefits or offering more money to lure new employees hourly wages are forecast to climb a sharp 05 in february such an increase would push the rise in pay over the past year to 58 one of the biggest increases in decades “labor shortages remain and wage gains are showing no signs of slowing” said joel naroff of naroff economic advisors unfortunately households aren’t really getting ahead they need to extra money to cope with the highest inflation since 1982 the cost of living surged by 75 in the 12 months ended in january the us economic recovery eventually could slow or even stall unless a lot more people enter the labor force in the next year or two the share of ablebodied people over 16 either working or looking for work stood at 622 in january well below the precrisis peak of 634 the socalled participation rate is expected to stay the same in february it doesn’t sound like much but the gap between the participation rate then and now reflects a shortfall of 32 million workers by contrast businesses have nearly 11 million open jobs even now companies can’t produce enough goods and services to keep up with demand so something has to give economists warn against reading too much into the us employment report or taking wall street’s djia spx forecast at face value the pandemic has made it harder for government statisticians to adjust employment gains for the normal seasonal swings in hiring and firing as a result the report has often sharply over or underestimated hiring gains each month whatever the case one thing is clear the february employment report won’t sway the federal reserve one way or another to combat high inflation the central bank plans to raise interest rates in march for the first time in four years in what’s likely to be the first in a series of rate hikes