Ahead of the US March jobs report at 8:30AM ET, the street is currently modeling up 200,000 (versus 175,000 in February) although the whisper numbers are notably higher now than earlier in the week. Traders suspect that additions for the month of March could reach 215-220,000 (with the most bullish forecasting 225,000-240,000, although this is probably a bit of a stretch).
It is no secret that the narrative has become incrementally more sanguine.
This is a result of more positive economic data this week (auto, ADP, and ISM) coupled with expectations for a rebound from January and February, which were hurt by colder weather. Economists are projecting a 6.6% unemployment rate for March vs. 6.7% in February. Critically, it would take a more extreme number or outlier (above 255,000 or below 140,000) to change the present policy course of the Federal Reserve. On Monday, Fed Chair Janet Yellen’s speech at the National Interagency Community Reinvestment Conference was more dovish, emphasizing the high degree of slack in the labor market.
According to Yellen, broader measures of the labor market health including part-time work and labor market turnover portray continued weakness. Wage growth remains subdued though “a significant amount of the decline in participation during the recovery is due to slack.”
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