The March jobs report due out on Friday is set to show another slowdown in the US labor market, though employment is likely to remain strong even with the Federal Reserve on board. Continue to raise rates trying to slow down the economy.
Wall Street economists expect non-farm payrolls to grow by 239,000 last month with the unemployment rate holding at 3.6%, according to data from Bloomberg.
in february, The economy added 311,000 new jobs While the unemployment rate rose to 3.6%, amid an increase in participation. The jobs report will be released on Friday at 8:30 AM ET. Financial markets in the United States will be closed on Friday, however, on Good Friday.
Investors will also be watching wage growth closely, as average hourly earnings are expected to rise 0.3% during the month and 4.3% from a year ago. In February, wages increased by 0.2% compared to the previous month and 4.4% compared to the same month last year.
The February jobs report was a strong enough signal for the Federal Reserve to move forward with a planned rate hike on March 22nd. Those numbers fell just hours ago Silicon Valley bank has been taken over by regulatorsHowever, with The signature bank is also closed by the regulators Two days later, on Sunday, March 10th.
However, the noticeable effects of the banking crisis are not expected to be seen in Friday’s report.
Andrew Hunter, deputy chief US economist at Oxford Economics, writes, “The March report comes in too early to capture much impact from recent banking-sector troubles, with problems in the SVB not reaching a peak until near the end of the survey period.” On last week’s note.
Instead, most Wall Streeters will be looking to see if this report argues for another 0.25% hike from the Fed next month. Data from the CME group As of Thursday afternoon, market pricing showed a 50-50 chance that either the Fed would choose to keep rates at current levels or increase its benchmark rate target range by another 0.25%.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, predicts that non-farm payrolls grew by 250,000 last month and wrote in a note to clients Thursday that this number would be “too high for the Fed.”
“FOMC members continue to worry that this rapid job growth will push the unemployment rate to new lows and/or prevent wage inflation from slowing to a pace in line with the inflation target,” Shepherdson added.
in press conference last monthFederal Reserve Chairman Jerome Powell called the job market “extremely tight” with average monthly job gains in the six months through February of 343,000.
Friday’s report, however, follows data on initial jobless claims on Thursday and private payroll data from ADP released on Wednesday that suggested the job market is slowing.
Initial claims are seen as the best real-time indicator of labor market stress; This action has shown some signs of increasing in the past few months, with claims It totaled 228,000 last week. The ADP report was released on Wednesday morning show up 145,000 jobs were added to the private sector last month, below expectations.
“The payroll data for March is one of several signs that the economy is slowing,” said Nella Richardson, chief economist at ADP, in a press release. “Employers are pulling back from a year of strong hiring and wage growth, after a three-month plateau, is easing.”
earlier this week, Employment data for the month of February It also showed that open roles in the economy continued to decline, another possible sign of a slowing labor market. February marked the first time since June 2024 that there were fewer than 10 million vacancies as of the end of the month.
However, some economists have been quick to note that while employment is declining, overall employment demand remains well above pre-pandemic levels.
“Openings remain significantly higher than previous cycle highs,” Wells Fargo economists wrote in a note to clients following Tuesday’s JOLTS report.
At the same time, despite the steady cadence of layoff announcements in recent months, companies are still fairly eager to hold on to workers. The rate of layoffs and layoffs fell to 1% in February, compared to an average of 1.2% during 2018-2019.
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Originally published