Could March be a turnaround for US jobs?

What to look for in September jobs report

After reaching a stratospheric high and a dismal low so far in 2019, here’s the question for Friday’s March jobs report: Which version of the labor market is closer to reality, January’s 311,000 jobs or February’s 20,000?

Economists are expecting that it’s somewhere in the middle.

Those polled by Refinitiv estimate that employers added 180,000 jobs last month, which would be only slightly below the average for the year. They think the unemployment rate will remain steady at 3.8%, and that wages will again rise by 3.4% from the same time last year.

That would be a reassuring outcome. Another low number, on the other hand, would reinforce the idea that February’s weakness was a sign that the economy’s bad month wasn’t because of the weather.

“The job market has been the one bright spot through all the volatility we’ve seen over the past year or so, and if we see some cracks in that story, it’s going to be a pretty significant shift,” says Marvin Loh, Global Macro strategist at the investment manager State Street.

Other indicators of the United States’ economic health have been trending down recently, including purchasing managers indices, which measure whether company executives see their business expanding or contracting. The Institute for Supply Management’s measure for services declined to a 20-month low in March.

In a sign of labor market jitters, job cuts reached 190,000 in the first quarter of this year, according to outplacement firm Challenger Gray <><><><><><><><><><><><><><><><><>& Christmas. It’s the highest number since 2015, when the oil industry was hemorrhaging jobs as energy prices tanked./ppLast week, the Bureau of Economic Analysis revised down its estimate of economic growth in the last quarter of 2018 from 2.6% to 2.2%. Current forecasts peg the first quarter’s gross domestic product number as coming in even lower./ppAnd a closely watched proxy for investor confidence in the immediate future, the “yield curve,” which measures the difference between short and long-term interest rates,a href=”” target=”_blank” flipped into negative territory /alast month for the first time since June of 2006. That’s historically been a harbinger of recession./pp”We’re late-stage in the cycle,” Loh said. “The inverted curve a couple weeks ago got everyone worried that things are getting worse faster than what a lot of economists had expected. And the jobs number is going to be looked at with respect to whether that’s correct or not.”/ppSo far, financial market indices have been holding up in the face of darkening economic data, nearly regaining the ground they lost in a precipitous fall at the end of last year. That may be because the economy still seems fundamentally solid, even if it’s off the temporary high induced by tax cuts and government spending last year. Initial jobless claims declined to a 49-year low last week, the Labor Department reported Thursday./ppA deceleration in hiring has long been expected, in part because it’s unclear how many workers remain on the sidelines that are available and skilled enough to take the types of positions employers are looking to fill./pp”Labor demand has been strong for a very long time now, and it’s hard to imagine that millions of people outside the labor force have only just become aware that their chances of finding a job have been transformed since the first dark years after the crash,” wrote Ian Shepherdson, chief economist of the analyst firm Pantheon Macroeconomics, in a note to clients this week./ppA sharp slowdown, though, could mean something more — and prompt the Fed to move from its stance of planning no more interest rate hikes this year to actually putting a rate cut back on the table./p