December 24, 2024

A worker operates a Bowlus recreational vehicle at the Bowlus factory in Oxnard, California, on February 23, 2024.

Timothy Epel | Reuters

March’s nonfarm payrolls data may show that hiring continues at a solid pace, although some of the labor market’s softer underpinnings may receive more attention when the Labor Department releases its key report Friday morning.

Job growth during this period is expected to reach 200,000, according to the Dow Jones consensus forecast. If that’s correct, it would mark a slowdown from the 275,000 originally reported in February, but is still a strong growth rate from a historical perspective.

However, a funny thing has happened with recent jobs reports: The initially strong numbers tend to be lowered in subsequent estimates, raising questions about whether the employment picture is as positive as it seems.

This will be just one of several areas of focus when the report is released at 8:30 a.m. ET.

Strong, but to what extent?

The trend “makes me question the credibility of that first number,” said Denos, senior economist at Allianz Trading Americas. “So I’m going to be looking for last month’s revisions to see if they’re going to be overturned, and they probably will be. That’s why if you get a big number, take it with a grain of salt.”

Wall Street had a surprise on the upside: Goldman Sachs raised its original forecast to 240,000, an increase of 25,000, after strong private payrolls data from ADP showed a gain of 184,000 for the month, and other indicators also increased.

growth momentum

inflation signal

Fed officials will be watching all of these factors closely for signs of inflationary pressures. Stocks have come under pressure this week as investors worry about the direction of monetary policy.

Average hourly earnings are expected to grow 0.3% in March, a jump from February’s 0.1%, but annual growth is expected to be 4.1%, or 0.2 percentage points lower.

If the consensus call is correct, it is unlikely to have much impact on the Fed, which is expected to Gradually cut interest rates starting in June futures market pricing Tracked by CME Group.

“Unless there’s a very positive or downright miserable jobs report, they’re going to keep going,” North said. “They’ve been very clear in pushing back on the market recently, saying we’re not in a hurry and inflation isn’t going to get down to 2%.”

However, North noted that he expects the Fed to wait until July to begin cutting interest rates – contrary to current market expectations.

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