Pimco: U.S. Jobs Report Preview

By Tiffany Wilding, North American Economist, and Allison Boxer, Economist, at PIMCO

The U.S. March employment report is likely to show a slower but still very strong pace of hiring when the data is released Friday. We expect nonfarm payrolls to rise 225k, modestly below the pace of hiring in February (311k), due to one-off factors (unseasonably warm weather, residual seasonality in retail hiring) not repeating in March.

However, we also think the rise in layoffs announcements that occurred in January won’t be fully included in the employment report until April. The U.S. requires companies with more than 100 employees to provide 60 days of advance notice of large scale layoffs (WARN). Most of the largest layoffs appear to have come in late January, which would put the 60 day notice period past the survey period for this report.

We expect the unemployment rate to tick back to 3.5% vs. 3.6% in February, assuming the participation rate remains unchanged. Elsewhere we look for a modest reacceleration in average hourly earnings, to 0.3% month-over-month (m/m) from 0.2% m/m, with risks towards rounding up.