Friday is one of the busiest days on the US economic calendar in months.
A number of crucial data points are about to be released.
Here’s what you need to know:
The Jobs Report
- Renaissance Macro
The March jobs report is first up at 8:30 a.m. ET.
The Bureau of Labor Statistics is forecast to announce that America added 205,000 nonfarm payrolls, and that the unemployment rate was unchanged at 4.9%
As the economy pulled out of recession, the pace of monthly job gains was the main focus of economists. But with the labor market now securely adding jobs every month, the focus has shifted to other metrics that haven’t quite caught up, especially wage growth and the labor force participation rate.
The rate has been pulled down largely by demographics, but has been increasing since last fall.
Renaissance Macro’s Neil Dutta wrote in a client note Thursday that the recent increase in the participation rate is the most important thing to watch for.
“Stronger labor force growth helps boost potential growth while keeping inflation pressures at bay,” he wrote. “That’s exactly the kind of situation the Fed should want right now.”
- Deutsche Bank
For over a year, manufacturing has been hurt by low energy prices and the strong dollar.
But we’re likely to see a rebound in March.
Markit Economics and the Institute of Supply Management will release their indexes of manufacturing at 9:45 a.m. and 10 a.m. ET respectively. And they are both forecast to show that the sector improved last month.
The expectation for a rise was built up after we got several strong regional readings. For example, the Empire State manufacturing index turned positive for the first time since July. The Philly Fed‘s index also surged above zero, to a seven-month high.
The February reading on construction spending is also due, at 10 a.m.
Auto sales had a record year in 2015.
But 2016 has had a shaky start.
And so, analysts will be looking out for signs of whether the pace of sales has peaked. Apart from being an indicator for the industry, auto sales are sometimes used as a proxy for consumer spending trends, since a car is quite the financial commitment.
Business Insider’s Matt DeBord recently reported from the 2016 New York Auto Show that the industry is divided into three camps: those who think there’s room for growth, those who think it will peak unless companies ramp up spending, and those who think sales will fall, but not below the 16-16.5 million annual pace.
One of these camps will look right – for now – by the end of Friday.
The expectation is for sales to rise at an annualized rate of 17.3 million, down from 17.54 million in February. According to Bloomberg, the decline would reflect slow vehicle sales.
The University of Michigan will release its latest survey of consumers at 10 a.m. ET.
The preliminary consumer confidence index missed expectations at 90, and showed among other things that consumers are starting to worry about rising gas prices.
Economists will be watching consumers’ inflation expectations, which have drifted lower in recent months.
Consumers are confident that low inflation will be a boost to their personal finances. But this hope is at odds with the Federal Reserve’s desire to drive up inflation.
- Thomson Reuters