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 Nonfarm payrolls probably increased 245,000 last month after
rising 295,000 in February, according to a Reuters survey of
economists. March would mark the 13th straight month of job gains
above 200,000, the longest streak since late 1993.
The labor market has largely shrugged off a harsh winter, a buoyant
dollar, weaker global demand and a now-resolved labor dispute at
West Coast ports, which have combined to undermine economic activity
in the first quarter.
Growth braked sharply over the past three months. Gross domestic
product estimates are as low as a 0.6 percent annual pace, but the
slowdown is expected to be temporary.
"If we get a number that's around consensus, then the arguments that
the economy slowed for fundamental rather than weather-related
reasons will disappear," said Joel Naroff, chief economist at Naroff
Economic Advisors in Holland, Pennsylvania.
The Labor Department will release its March employment report at
8:30 a.m. (1230 GMT) on Friday. Most overseas financial and U.S.
stock markets will be closed for the Good Friday holiday, but U.S.
bond markets will open for a few hours, with the jobs data setting
the tone.
The unemployment rate is forecast to hold steady at a more than
6-1/2 year low of 5.5 percent. It is now in territory that some Fed
officials consider consistent with full employment.
There is a risk, however, that payroll growth could print well below
expectations after a report on Wednesday showed a big step back in
private hiring in March. Still, any number above 200,000 will be
seen as positive for the economy.
"Job growth over the last months has been booming; some moderation
is expected," said Ryan Sweet, a senior economist at Moody's
Analytics in West Chester, Pennsylvania.
According to Sweet, the economy needs to create between 100,000 and
120,000 jobs a month to keep up with population growth and continue
to absorb the slack in the jobs market.
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Average hourly earnings will be closely watched for clues on the
timing of a Fed rate hike. Average hourly earnings are expected to
have increased by 0.2 percent in March, a tepid pace that could
offer little fresh direction for investors.
SEPTEMBER LIFT-OFF?
With Wal-Mart <WMT.N> and McDonald's <MCD.N> announcing pay
increases for their hourly workers, wage growth could gain some
traction in the months ahead. Other companies, including TJX Cos Inc
<TJX.N> and health insurer Aetna <AET.N>, also have announced wage
increases.
The U.S. central bank has sounded keen to raise overnight interest
rates, which it has kept near zero since December 2008. But the
economy's recent softness has led investors to push back bets on the
rate lift-off. Some believe the Fed could even wait until 2016.
"We expect activity to rebound, but it's probably not going to be
strong or fast enough for the Fed to entertain the idea of rate hike
before September," said Sam Bullard, senior economist at Wells Fargo
Securities in Charlotte, North Carolina.
(Reporting by Lucia Mutikani; Editing by Dan Grebler)
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