US Nonfarm Payrolls Expected to Exceed 200,000 for the Fourth Consecutive Month

US Nonfarm Payrolls Expected to Exceed 200,000 for the Fourth Consecutive Month

(Bloomberg) — U.S. employment gains continued in March while wage growth moderated, indicating the nation’s labor market is poised to continue fueling the economy with a limited risk of a resurgence of inflation.

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Payrolls in the world’s largest economy are expected to rise by at least 200,000 for the fourth straight month, according to a Bloomberg survey of economists. The average hourly wage is expected to increase by 4.1% compared to the same month last year, the smallest annual increase since mid-2021.

Resilient hiring keeps demand and the economy moving while inflation slows, albeit unevenly. It also allows policymakers at the Federal Reserve to pause cutting interest rates while waiting for further easing of price pressures.

Read more: Powell says latest inflation data ‘in line with expectations’

On Wednesday, Fed Chairman Jerome Powell headlines a slew of Fed policymakers scheduled to speak this week. Other cast members include John Williams, Adriana Kugler, Mary Daly, Austan Goolsbee, Lorie Logan and Thomas Barkin.

An increase in labor supply helps to limit wage pressures that might otherwise result in a lasting pick-up in inflation.

Friday’s jobs report is also expected to show the unemployment rate fell to 3.8%, just below the two-year high reached in February, suggesting the job market is losing some momentum.

What Bloomberg Economics says:

“The two main surveys used to create the jobs report appear to reflect different aspects of the U.S. economy. Spending on services by those benefiting from asset price appreciation – primarily baby boomers – has supported employment in leisure, hospitality and health care.

At the same time, falling demand from the most disadvantaged segments of the population has translated into a slowdown in business sales and reduced hiring or increased layoffs in other sectors. We expect this dichotomy to appear once again in the March report, sending mixed messages to policymakers.”

— Anna Wong, Stuart Paul, Eliza Winger and Estelle Ou, economists. For a full analysis, click here

February job opening data released Tuesday will offer insight into labor demand. Although economists predict a decline, job vacancies remain higher than their pre-pandemic levels.

Other reports will be released next week, including two surveys of purchasing managers of manufacturers and service providers.

Turning north, Bank of Canada surveys will offer insight into inflation expectations ahead of its April 10 rate decision. Canadian employment data will be released at the same time as the United States, and trade data will also be released.

Elsewhere, surveys of Chinese purchasing managers are planned and a range of key inflation figures are expected, from the euro zone to Turkey to Colombia. Central banks from India to Chile will set interest rates.

Click here to see what happened last week, and below you’ll find our summary of the latest news in the global economy.

Asia

China’s PMIs, due Sunday, will dominate the start of the week as policymakers, investors and analysts attempt to gauge the current strength of the world’s second-largest economy.

Activity in the manufacturing sector should return to expansion for the first time since September, while growth in the services sector should maintain largely the same pace as in February.

The next day, the Caixin manufacturing indicator showed a weaker expansion in its measure of activity, focused more on the private sector.

PMI indices of economies across the Asia-Pacific region released on the same day will provide insight into the regional growth outlook.

The Bank of Japan’s quarterly Tankan survey will likely reflect a continued divergence in sentiment across industries. The indicator for large manufacturers is expected to fall for the first time in a year, while that for large non-manufacturers could reach its highest level in 32 years.

Small businesses will likely be pessimistic, an outcome that could undermine wage gains in SMEs needed to fuel the virtuous circle sought by the BOJ.

South Korea’s export growth is expected to slow in March, while consumer inflation data released Tuesday likely dampened the trend.

Price increases could accelerate moderately in Indonesia and the Philippines. The drop in Thai prices is expected to ease.

The Reserve Bank of Australia releases minutes of its March meeting on Tuesday, with two board members expected to speak during the week. The Reserve Bank of India is expected to keep its key policy rates unchanged on Friday.

Europe, Middle East, Africa

After last week’s consumer price reports in France, Italy and Spain, and after a region-wide holiday on Monday, more pieces of the puzzle will emerge, revealing the strength, or otherwise, of the pressures. in the eurozone.

German inflation is expected to continue to weaken on Tuesday, moving closer to the 2% target. The European Central Bank will unveil its survey on consumer expectations on the same day.

The inflation figure in the euro zone will be published on Wednesday. The results expected by economists at 2.5% – and 3% for the underlying indicator that excludes volatile energy and food products – could prompt officials to move towards cutting rates in the coming months , as they assess the extent to which their policies restrict growth.

Members of the Governing Council have until the end of Wednesday to provide their views before a blackout period comes into effect ahead of their April 11 decision. More clues about their thinking could emerge the next day, when the account of their last meeting is published.

On Thursday, the Riksbank will publish the minutes of its March decision, highlighting a result that saw officials confirm their intention to cut rates at some point during the second quarter.

Switzerland will publish inflation figures on Thursday. Although an acceleration is expected, if it happens as expected at 1.4%, this figure would still be well below the ceiling targeted by the Swiss National Bank, which recently lowered its rates.

And in Turkey, where the central bank has taken aggressive tightening measures, data released Wednesday could show a further acceleration in consumer price growth, up to 70%.

Several monetary meetings will take place this week in Europe and Africa:

  • In Sierra Leone, where inflation remains above 40%, authorities could be persuaded to raise borrowing costs again on Tuesday.

  • The same day, Lesotho, whose currency is pegged to the South African rand, could follow its neighbor and maintain its key rate at 7.75% to support its economy.

  • In East Africa, Kenya’s monetary authority is also expected to leave its benchmark unchanged on Wednesday after the currency’s rise helped moderate prices.

  • Further east, Mauritius authorities may increase borrowing costs after inflation rose to an eight-month high amid recent heavy rains caused by tropical cyclones.

  • Back in Europe, the Polish central bank is preparing to maintain its benchmark index at 5.75% on Thursday against a backdrop of standoff with the government.

  • The Romanian central bank could consider the timing of its first rate cut after inflation begins to ebb. It’s also Thursday.

Latin America

Chile releases its February GDP proxy data on Monday, likely reinforcing the view that its economy is poised to rebound.

The central bank on Tuesday is almost certain to cut borrowing costs for a sixth straight meeting, with early consensus forecasting a 75 basis point cut to 6.5%, even if higher consumer prices and a oscillation in inflation expectations could lead to a more modest reduction. stake.

Brazil releases a range of data, including monthly trade, industrial production, current account, foreign direct investment and primary and nominal budget figures.

The highlight of the week in Mexico is the release of the minutes of Banxico’s March 21 decision to cut the policy rate to 11%. Even if the post-meeting communiqué was rather hawkish, the minutes could take that mood up a notch or two.

Peru’s inflation data released Monday could show the annual figure falling below 3%, enough to persuade bank President Julio Velarde and his colleagues to resume cutting borrowing costs at their meeting of the April 11.

The Colombian central bank publishes the minutes of its decision of March 22, when it doubled the pace of its easing measures and lowered its rate to 12.25%.

With March consumer price data expected to show a 12th straight month of disinflation, the odds favor another half-point rise at BanRep’s April meeting.

–With help from Zoe Schneeweiss, Robert Jameson, Patrick Donahue, Brian Fowler, Laura Dhillon Kane and Molly Smith.

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