Economists React to the March Jobs Report: ‘Bottom Line: Ouch’
Economists React to the March Jobs Report: ‘Bottom Line: Ouch’, Bottom Line: Ouch! American businesses pulled back on hiring in March, likely due to uncertainty about how long the recent soft patch will last. We suspect it won’t last long.” –Sal Guatieri, BMO Capital Markets
“With regards to the economy, a poor jobs report, while a surprise relative to consensus, is not a surprise given the weak economic data prints we’ve seen of late (first-quarter GDP less than 1%?). With regards to the Fed, the price action tells us all we need to know. The odds of a June rate hike, already diminished, will probably move even lower (with the caveat that the Fed follows trends and not any one, single data point) and while we remain of the belief that the first hike comes in September, those odds of that happening have to be lower as well.” –Dan Greenhaus, BTIG
“Payrolls are always volatile even at the best of times and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer. All the other labor market indicators that we track point suggest that labor market conditions are still very strong: Initial jobless claims are unusually low, the job openings rate is near a record high and the employment indices in the various activity surveys are at robust levels. Accordingly, we very much doubt this is the start of a new slump, like we’ve seen occasionally before during this recovery.” –Paul Ashworth, Capital Economics
“Job creation data had been strong in recent months, providing reason for optimism against a host of other data that has softened in recent months. If anything, the fact that the jobs market is showing signs of slowing reinforces the validity of the other data. Having said that, it’s important to maintain some perspective. Even if the March numbers are not an aberration and the pace of job creation slows from the robust pace in recent quarters, jobless claims remain in a constructive range. Moreover, nonfarm payrolls would still be growing at an annual pace of roughly 1.5 million, which is far from weak.” –Jim Baird, Plante Moran Financial Advisors
“The market quickly repriced ‘liftoff’ further out in the calendar. Although this number fits with my view, I can’t help but think that the markets will need more of these weak types of numbers for the rally to hold.” –Steven Ricchiuto, Mizuho Securities
“This was a very disappointing jobs report, and the dramatic falloff in employment growth confirms the emerging narrative of slowing growth momentum seen in the other economic indicators. This number is now better aligned with the body of evidence in the other data that is pointing to a slowing in growth momentum to a 0.5% or 1.0% pace of GDP growth in the first quarter. Admittedly, this single report will not necessarily result in the Fed changing tact on its view of policy tightening this year. However, what it will do is weaken the argument for a mid-year hike and it will place a greater premium on the next few employment reports as the Fed looks for evidence that the relapse in economic growth and labor market momentum is temporary. As such, our base-case continues to be for the Fed to hold the line on rates until September this year, though the balance of risks is now shifting to a later start to liftoff.” –Millan Mulraine, TD Securities
“With regards to the economy, a poor jobs report, while a surprise relative to consensus, is not a surprise given the weak economic data prints we’ve seen of late (first-quarter GDP less than 1%?). With regards to the Fed, the price action tells us all we need to know. The odds of a June rate hike, already diminished, will probably move even lower (with the caveat that the Fed follows trends and not any one, single data point) and while we remain of the belief that the first hike comes in September, those odds of that happening have to be lower as well.” –Dan Greenhaus, BTIG
“Payrolls are always volatile even at the best of times and we are coming off a run of almost unbelievably strong employment growth stretching back to last summer. All the other labor market indicators that we track point suggest that labor market conditions are still very strong: Initial jobless claims are unusually low, the job openings rate is near a record high and the employment indices in the various activity surveys are at robust levels. Accordingly, we very much doubt this is the start of a new slump, like we’ve seen occasionally before during this recovery.” –Paul Ashworth, Capital Economics
“Job creation data had been strong in recent months, providing reason for optimism against a host of other data that has softened in recent months. If anything, the fact that the jobs market is showing signs of slowing reinforces the validity of the other data. Having said that, it’s important to maintain some perspective. Even if the March numbers are not an aberration and the pace of job creation slows from the robust pace in recent quarters, jobless claims remain in a constructive range. Moreover, nonfarm payrolls would still be growing at an annual pace of roughly 1.5 million, which is far from weak.” –Jim Baird, Plante Moran Financial Advisors
“The market quickly repriced ‘liftoff’ further out in the calendar. Although this number fits with my view, I can’t help but think that the markets will need more of these weak types of numbers for the rally to hold.” –Steven Ricchiuto, Mizuho Securities
“This was a very disappointing jobs report, and the dramatic falloff in employment growth confirms the emerging narrative of slowing growth momentum seen in the other economic indicators. This number is now better aligned with the body of evidence in the other data that is pointing to a slowing in growth momentum to a 0.5% or 1.0% pace of GDP growth in the first quarter. Admittedly, this single report will not necessarily result in the Fed changing tact on its view of policy tightening this year. However, what it will do is weaken the argument for a mid-year hike and it will place a greater premium on the next few employment reports as the Fed looks for evidence that the relapse in economic growth and labor market momentum is temporary. As such, our base-case continues to be for the Fed to hold the line on rates until September this year, though the balance of risks is now shifting to a later start to liftoff.” –Millan Mulraine, TD Securities
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