REUTERS/Mike Blake
At 8:30 a.m. ET, the Bureau of Labor Statistics will publish data on how the US labor market did in March.
Via Bloomberg, here's what Wall Street is forecasting:
- Nonfarm payrolls:+205,000
- Unemployment rate: 4.9%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.2%
- Average weekly hours worked: 34.5
These days, well into the recovery, the focus has shifted to metrics within the report that have not done so well in this cycle.
In a note to clients Thursday, Renaissance Macro's Neil Dutta said he would be watching the labor force participation rate most closely in this report.
It fell to a 38-year low of 62.4% last September, but rose in the following months. Because it's driven largely by demographics, some economists are forecasting that it's not going to rise sharply soon.
Here's Dutta (emphasis added):
"The unemployment rate is expected to remain flat in March at 4.9%. This would imply just a 0.1ppt drop over the last six months, the slowest pace of decline since July 2012. Then the labor force participation rate was flat over a six month period. Today, the participation rate has actually climbed 0.3ppt over the last six months. Stronger labor force growth helps boost potential growth while keeping inflation pressures at bay. That's exactly the kind of situation the Fed should want right now."
Wage growth will also continue to be in focus, as the hard data are yet to catch up with tons of anecdotes from employers about wage pressures.
February was a strong month for black and hispanic workers, who accounted for 62% of the job gains during the month. Economists will be watching for whether there's further improvement among these demographics.
Stock futures were lower ahead of the jobs report, with Dow futures down 66 points near 7:45 a.m. ET, and S&P 500 futures off 0.45%.
"We think there is risk of an asymmetric market reaction," wrote Marc Chandler and team at Brown Brothers Harriman in a client note.
He thinks that following Federal Reserve chair Janet Yellen's recent assurance of slowly rising rates, a strong number may not impact the dollar or bond market very much. However, a weak number could.