NFP Preview: Forecasts From 4 Major Banks

The US Bureau of Labor Statistics (BLS) will release the March jobs report on Friday, April 1 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 4 major banks regarding the upcoming employment data. 

CIBC

“Employers likely added 490K to headcounts, with gains being concentrated in private services that were adversely impacted by the pandemic. Higher wages were likely on offer in an attempt to overcome the ongoing labor shortage, but with hiring likely skewed towards lower-paying positions within already lower value-added sectors, aggregate wages could have shown an only moderate 0.3% advance. We’re close enough to the consensus forecast to imply little market impact. Another strong month of hiring would add to the urgency for further Fed tightening, with a 50bps hike likely in store at the next FOMC.”

Citibank

“US March Nonfarm Payrolls – Citi: 490K, prior: 678K; Average Hourly Earnings YoY – Citi: 5.3%, prior: 5.1%; Unemployment Rate – Citi: 3.7%, prior: 3.8%. the trend of monthly payrolls growth over the last 9 months has been steady within a ~450K-650K range and we expect another increase consistent with this pace in March. Meanwhile, we expect a somewhat modest increase of 0.3% MoM in average hourly earnings in March given the bounce-back in total hours worked following reduced worker absences but the US unemployment rate should fall to 3.7% in March based on a similar pattern in the household survey of employment as last month.”

Commerzbank

“In recent months, 500 to 700 thousand new jobs have been created on a regular basis. We expect a similar result for March (forecast 500K). High-frequency data on the number of restaurant diners and airline passengers, for example, point to a noticeable increase in jobs especially in the service sector, which is benefiting from the subsiding of the omicron wave. Accordingly, the labor market is tightening. We forecast a further decline in the unemployment rate to 3.7%. Already at last count, the 6 million unemployed could choose between 11 million unfilled jobs – a ratio that Federal Reserve Chairman Powell recently called ‘unhealthy’. The March employment report is thus likely to reinforce his inflation concerns.”

TDS

“Employment likely continued to advance in March following two strong reports averaging +580k in Jan and Feb. That said, we expect some of that boost to fizzle, though to a still firm job growth pace of 350K. Indeed, job gains should lead to a new drop in the unemployment rate to a post-COVID low of 3.7%. We also expect wage growth to slow to a still firm 0.3% MoM pace.”