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Questions Ahead of Tomorrow’s Job Report

American labor markets have been on a tear and all eyes are fixed on tomorrow’s job numbers.  Economists predict the Labor Department to announce a 245,000 rise in payrolls in March. That would come on the heels of a 295,000 jump in February. For the past 12 months, jobs have risen by at least 200,000 every single month, the largest stretch since 1995. Of course, this does not account for population growth – but it is nonetheless a serious hot streak.

Wages remain in focus as economists sift through the data to find any hint of wage growth – thus far a lagging component of the recovery, due in part to the slack created by folks leaving the workforce voluntarily (i.e. not retiring, getting sick, etc.).

Even with strong growth we might likely see the unemployment rate hold steady at 5.5%, a 5-year low. A strong hiring climate brings workers back into the labor force, mitigating the effect of higher numbers of employed people.

Questions over the effects of oil’s collapse, the subsiding of winter, and a strong dollar will all be in the spotlight. Of course, we will also be watching to see what sort of revisions the Labor Department will make on past reports – often times the biggest cause of major market moves. That said, tomorrow is also Good Friday, so it might be a little tougher to infer the market’s reaction to the announcement.


  1. Stephen Moore Stephen Moore

    I believe the mining industry took the largest dip in February’s report, while most other industries plateaued or grew. It is still interesting to see unemployment fall to right around the natural rate of unemployment. Could be a strong argument for raising interest rates if inflation can pick up again.

  2. moorem15 moorem15

    With the benefit of hindsight, it’s the degree of the slowdown in hiring is remarkable- only 126,000 jobs in March. I’ve read analysis blaming it partially on the winter weather, but I can’t help but worry that it’s a sign that the recovery isn’t as strong as we had hoped.

  3. cookg15 cookg15

    The “winter weather” rationale does seem to be a bit farfetched. While this was a bad winter in terms of national snowfall, I think the hiring slowdown wouldn’t be affected as much as it was. I do agree with Stephen, however, that there are indications that it might be time to raise interest rates.

  4. I’ve not paid much attention to sectoral data other than autos. Sales there are high but from a high base so not much increase in employment. That’s the story across the board — not much — but slack remains extensive, by my calculation 6 million as I look at employment, not unemployment.

    I don’t track hours, my understanding is there’s not much there, nothing to change the significance of the numbers I follow.

  5. winn winn

    How close is the US to the natural rate of unemployment? I would imagine that these numbers won’t continue their steady decline for much longer.

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