WASHINGTON (MarketWatch) — The easiest way to explain why the U.S. economy appears poised for its best growth in years can be found in a pair of words that have become more and more common: Help wanted.

Over the past year the U.S. has cranked out an average 259,000 new jobs a month, including almost 1 million positions in the last three months alone. That’s the strongest increase in employment in a decade and a half.



Nor is there any sign hiring is about to crumple. The U.S. added 252,000 jobs in January and economists polled by MarketWatch predict a milder but still-healthy 235,000 gain in February. The unemployment rate is seen dipping to 5.6% from 5.7%, though the official figure excludes millions of people who’ve given up looking for work and those who can only find part-time jobs.

In any case, the spike in hiring has set the stage for faster economic growth even though there’s little evidence yet that workers are receiving sharply higher wages. More Americans working means more people eating out, more car sales, more home buying and so forth — even if people who already had a job don’t increase their spending at all.

Better yet, that will spur businesses to raise their own spending.

“All the gains in the labor market have generated plenty of momentum that will support more consumer spending,” said Sam Bullard, senior economist at Wells Fargo. “There will come a point when businesses will need to expand to keep up with the pace of orders and sales.”

The undercard

Don’t expect to see evidence of higher spending in January, however. Consumer outlays in the first month of the year are forecast to drop 0.1%, at least in the headline number. The chief reason: households spent a lot less on gasoline after one of the biggest monthly price declines in years.

Yet the details of the report, to be released Monday, are likely to show a modest advance in consumer spending in other key categories. Just as important, an accompanying price index known as PCE is expected to underscore a lack of inflationary pressure in the economy.



Lower energy costs are easing prices on a variety of goods and services, giving Americans more bang for their buck. So look for a boost in inflation-adjusted incomes in January, another factor that economists believe will spur U.S. growth in 2015.

A few patches of the economy that could see a short-term caution flag are manufacturing and export-driven business. Large companies with heavy international exposure are still doing pretty well, but weak global growth and a stronger dollar have made it harder for them to sell goods in other countries.

A survey of manufacturing executives released by the Institute for Supply Management on Monday is likely to point to moderate but steady growth in early 2015. Exports could also soften in January, though the plunge in oil prices probably will result in a smaller trade deficit.

With the undercard out of the way, Wall Street will zero in on Friday’s employment report for February. Although the winter months sometimes offer a preliminary jobs number that disappoints expectations, longer-term trends point to strong job gains in the months ahead.

Job openings are at a 14-year high, for one thing. And a handful of the nation’s biggest employers such as Wal-Mart WMT, -1.02% and Aetna US:AET are giving hefty wage increases to their lowest-paid employees, a telltale sign of a tightening labor market in which companies have to compete harder for talented workers.

“The labor market does not have as much slack as many people think,” said Bob Baur, chief global economist at Principal Global Investors.