US employment probably rebounded in March after one of the biggest pullbacks in payrolls since the pandemic, extending a string of volatile readings.
Economists estimate 60,000 jobs were added for the month following a 92,000 decline, according the median of a Bloomberg survey ahead of Friday’s report. The jobless rate is seen holding steady at 4.4 per cent.
Payrolls haven’t increased in consecutive months since May of last year, illustrating a labour market that lacks any notable hiring momentum but also few signs of a concerning deterioration. Against this backdrop of limited job opportunities, war in the West Asia has rekindled Americans’ concerns about inflation as gasoline prices jump.
Economists are penciling in a bounce back in March payrolls after disappointing February results that included possible weather-related declines in construction as well as leisure and hospitality employment. Health care payrolls may also push higher following the end of a strike by more than 30,000 Kaiser Permanente employees.
Subdued employment growth and added price pressures will put consumer resilience to the test. Retail sales data out Wednesday are projected to show demand was holding up in February as purchases of automobiles rebounded. Excluding car dealers and gasoline service stations, economists project another 0.3 per cent advance.
Federal Reserve policymakers are weighing the durability of demand and modest hiring against the likelihood of an undesired pickup in inflation fed by higher energy costs. On Monday, Fed Chair Jerome Powell will participate in a moderated discussion at Harvard University, where he may offer clues on how he sees the war affecting the balance of risks to inflation and employment.
What Bloomberg Economics Says:
“We expect March nonfarm payrolls rose 80k, reflecting a rebound in strike-affected payrolls, sluggish private-sector hiring and a continued drag from federal payrolls. A gain around that amount would be roughly in line with what’s needed to keep the unemployment rate stable given current trends in labor-force growth, and we expect the rate to hold at 4.4 per cent.”
—Anna Wong, Stuart Paul, Eliza Winger, Chris G. Collins, Alex Tanzi and Troy Durie.
Among other economic reports this coming week, the Institute for Supply Management will release its March manufacturing index. Economists forecast the gauge to show a third straight month of expanding activity — the first time that’s happened since 2022.
In Canada, gross domestic product data for January, along with February’s flash estimate, may signal tepid growth. A summary of the Bank of Canada’s deliberations should shed light on its decision to keep interest rates on hold. And February’s merchandise trade report will likely show a persistent deficit amid ongoing US trade tensions.
Group of Seven energy and finance ministers will convene for a virtual call on Monday, while countries from the euro zone to South Korea will release inflation data showing the impact of the war. Colombia’s central bank may deliver a jumbo rate hike.
Asia
Asia’s data calendar will offer an early read on regional demand and activity as the West Asia conflict clouds the global outlook and pushes energy prices higher.
The week starts with the Bank of Japan publishing a summary of opinions from its March 18-19 meeting. India releases industrial production for February as well as its year-to-date fiscal deficit figure.
Attention shifts Tuesday to Japan’s Tokyo inflation for March alongside labor market and retail indicators for February. The figures provide a timely read on price pressures and consumption as the Bank of Japan weighs further normalization.
The Reserve Bank of Australia releases minutes of its March meeting when it delivered a second consecutive rate hike.
Wednesday is key, with Japan’s Tankan survey and a full slate of manufacturing PMI readings across the region following a first spate of initial numbers last week from some major global economies.
The survey results due this time include China, South Korea, Indonesia and several Southeast Asian economies. The data will offer a snapshot of factory activity after the US-Israel war on Iran hit energy supplies, sending gasoline prices surging.
Australia releases building approvals data for February amid an ongoing housing shortage while Indonesia has consumer price data and trade balance.
South Korea publishes its inflation report for March on Friday, Australia has trade data and India publishes manufacturing PMIs.
Europe, West Asia, Africa
Data showing that the euro zone suffered the biggest inflation jump this month since Russia invaded Ukraine in 2022 are expected on Tuesday. Consumer-price growth in the wake of the US attack on Iran is seen by forecasters to have surged by 0.7 percentage point to 2.6 per cent.
Those numbers will incorporate Germany’s report on Monday, and France’s early the following day, as well as Italy and an estimate of the rest of the region. Various European Central Bank officials speaking during the week could react to the reports.
Other countries neighboring the euro area will also release consumer-price readings. In Poland, the inflation rate is seen jumping 1.1 percentage point to an nine-month high.
In Switzerland, which has struggled to generate price growth because of the strength of the franc, an acceleration to 0.5 per cent on the national measure is predicted by economists. That would be the fastest since 2024.
Italy’s final deficit measurement for 2025 will be released on Friday, in what will be a pivotal report showing whether the country exceeded the European Union’s 3 per cent of GDP ceiling. France will publish its industrial production number for February the same day.
In the UK, a record of the Bank of England’s most recent Financial Policy Committee meeting is due on Wednesday, potentially offering insights on volatility that infected the gilt market this month. The BOE’s Decision Maker Panel report, featuring price expectations, is scheduled for the following day.
Latin America
In Colombia on Tuesday, an early consensus is looking for the central bank to deliver a second straight 100 basis-point rate increase, pushing the benchmark up to 11.25 per cent.
BanRep’s inflation concerns pre-date the Iran war, and now in light of the escalating conflict that’s roiling monetary policy globally, February’s terminal rate estimate of 11.75 per cent may not hold.
A raft of reports are on tap from Brazil in the coming week including industrial production, the central bank’s market readout, the central government budget balance, formal job creation and the IGP-M general price index, which is the country’s broadest gauge of inflation.
Chile will post the minutes of the central bank’s March 24 policy meeting, GDP-proxy data for February and copper production.
Officials held Chile’s key rate at 4.5 per cent as expected, but the government’s Iran war-driven 54 per cent fuel price hike may well mean that the next move is up.
The conflict is doubly damaging for the country as slower global growth will likely dent prices for copper — its main export — while also stoking inflation, given that Chile imports nearly all its fuels.
Consumer prices data for Peru’s mega-city capital of Lima posted Wednesday can be expected to accelerate for a fifth month.
A leak in a key natural gas pipeline in early March precipitated Peru’s worst domestic energy crisis in years, which however brief coincided with the Iran war-induced spike in global fuel prices. The central bank now sees a year-end inflation rate of 2.4 per cent, up from an earlier forecast of 2 per cent.