February jobs report, Zoom earnings: What to know in the week ahead

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After last week's volatile bout of stock trading, investors this week are set to focus on new labor market data, as well as a dwindling batch of quarterly earnings results.

The U.S. Labor Department's February jobs report set for release on Friday will be one of the main reports of the week, offering a fresh look at the state of the labor market recovery after back-to-back disappointments in each of the January and December reports.

Consensus economists are expecting to see that non-farm payrolls rose by 150,000 in February, accelerating from the tepid gain of 49,000 a month earlier. The unemployment rate likely ticked up to 6.4% from 6.3%, though any increase could be in part the result of rising labor force participation as unemployed Americans resume their job searches in anticipation of more business reopenings.

In December and January, service-related jobs bore the brunt of payroll declines, as a resurgence in new COVID-19 cases around the holidays led to new social distancing restrictions that weighed on jobs in high-contact fields. Leisure and hospitality payrolls dropped by 61,000 in January, following a plunge of more than half a million in December.

However, COVID-19 new cases and hospitalizations have fallen precipitously after a spike at the beginning of the year, allowing some restrictions to ease. The February jobs report will likely reflect a pick-up in employment as a result of these improving virus-related trends.

"We expect leisure and hospitality employment to increase based on restaurant activity data and also look for modest rebounds in other industries, consistent with high-frequency data on jobless claims and alternate employment indicators," Nomura economist Lewis Alexander wrote in a note Friday.

"However, the report will likely still show some pockets of weakness. Cold temperatures during the survey week, ahead of the disruptions that affected a large swathe of the country in mid-February, likely weighed on construction employment," he added. "Moreover, seasonal distortions that boosted private and state and local educational employment in January will likely result in employment declines for those industries in February."

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