Job gains expected again in March. Here are all the things to look for in Friday’s report

The
March
nonfarm
payrolls
count
likely
will
indicate
hiring
continuing
at
a
solid
pace,
though
some
weakening
foundations
of
the
labor
market
could
take
greater
focus
when
the
Labor
Department
releases
its
key
report
Friday
morning.

Job
growth
is
expected
to
come
in
at
200,000
for
the
period,
according
to
the
Dow
Jones
consensus
forecast.
If
that’s
correct,
it
will
mark
a
slowdown
from

February’s
initially
reported
275,000
but
is
still
a
strong
pace
by
historical
terms.

Yet
a
funny
thing
has
been
happening
with
the
jobs
reports
recently:
Initially
strong
numbers
have
tended
to
be
lowered
in
subsequent
estimates,
raising
questions
about
whether
the
jobs
situation
is
as
positive
as
it
looks.

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

February’s
release
raised
eyebrows
with
a
gain
that
trounced
the
Wall
Street
outlook
for
198,000
new
jobs.
Also
gaining
notice,
though,
were
revisions
to
the
prior
two
months
that
reduced
December’s
count
by
43,000
to
290,000
and
January’s
by
a
whopping
124,000
to
229,000.

For
all
of
2023,

revisions
took
520,000
off
the
initial
estimates
—
there
are
three
readings
in
total
—
countering
a
historical
trend
in
which
the
final
numbers
are
generally
higher
than
the
first
readings.

The
trend “makes
me
wonder
about
the
credibility
of
the
first
number,”
said
Dan
North,
senior
economist
at
Allianz
Trade
Americas. “So
I’ll
be
looking
for
the
revisions
from
the
prior
month
to
see
if
they’re
going
to
be
knocked
down,
and
most
likely
they
will
be.
That’s
why
if
you
get
a
big
number,
take
it
with
a
grain
of
salt.”

There
is
some
anticipation
on
Wall
Street
of
an
upside
surprise:
Goldman
Sachs
raised
its
initial
forecast
to
240,000,
an
increase
of
25,000,
following
strong

private
payroll
data
from
ADP
showing
a
gain
of
184,000
on
the
month,
and
other
indicators.

Along
with
numbers,
composition
is
important,
namely
where
the
growth
is
coming
from
and
whether
there
are
any
cracks
in
the
employment
armor.
The
job
market’s
resilience
has
confounded
many
economists
who
spent
the
past
two
years
searching
for
a
jobs-led
recession
that
never
happened.

“Firms
are
seeing
strong
demand.
They’ve
dramatically
increased
their
productivity,
and
so
they’re
hiring
for
different
kinds
of
jobs,”
said
Luke
Tilley,
chief
economist
at
Wilmington
Trust. “That
has
enabled
them
to
deal
with
the
high-rate
environment.”

Still,
there
are
areas
of
concern.

Household
employment,
which
counts
individual
workers
rather
than
total
jobs
and
is
used
to
calculate
the
unemployment
rate,
has
fallen
by
nearly
1
million
since
November.
The
survey
is
more
volatile
and
uses
a
much
smaller
sample
than
the
establishment
count
that
yields
the
headline
payrolls
growth
total.
But
there’s
no
obvious
reason
for
the
weakness,
though
some
economists
speculate
it
could
involve
the
surge
in
illegal
immigration
over
the
past
few
years.

Also,

full-time
employment
has
declined
slightly
over
the
past
year,
while
the
rolls
of
part-time
workers
have
swelled
by
more
than
900,000.
There
also
has
been
a
sharp

decline
in
temporary
workers,
a
classic
sign
of
a
slowdown.

Federal
Reserve
officials
will
watch
all
those
factors
for
signs
of
inflation
pressures.
Stocks
have
been
under
pressure
this
week
as
investors
worry
about
the
direction
of
monetary
policy.

Average
hourly
earnings
are
projected
to
have
increased
0.3%
in
March,
which
would
be
a
jump
from
0.1%
in
February,
though
the
estimate
for
the
annual
gain
is
4.1%,
or
0.2
percentage
point
less.

If
the
consensus
calls
are
correct,
it’s
unlikely
to
move
the
needle
much
for
the
Fed,
which
is
expected
to

begin
cutting
interest
rates
gradually
starting
in
June,
according
to

futures
market
pricing
tracked
by
the
CME
Group.

“Unless
there
is
a
wildly
positive
or
outright
tragic
employment
report,
they’re
going
to
stay
on
course,”
North
said. “They’ve
been
really
clear
recently
pushing
back
on
the
market,
saying
we’re
in
no
big
hurry,
inflation
is
not
down
to
2%.”

North
said
he
expects
the
Fed
to
wait
until
July
before
it
starts
cutting
rates
—
contrary
to
current
market
expectations.