US Nonfarm Payrolls Prep

On Friday, the 4th of April, at 08:30 ET, the BLS releases the latest Employment Situation report representing March.
Here are some views on what to expect.

Overview
Forecasts subject to change
Median forecasts see Nonfarm Payrolls moving down to 138k from 151k.
According to a survey of 44 qualified economists, the highest estimate is 185k, and the lowest is 80k.

For the Unemployment Rate, the median forecast expects it to remain unchanged at 4.1%.
The highest estimate is 4.2%, the lowest is 4%

General Expectations
Despite inflation being the biggest worry in the Fed’s dual mandate at the moment, the employment situation in the US is still highly monitored by the markets and Fed officials, with NFP holding the spotlight for traders to hopefully gain an insight into the economy’s health but also for signs that will open the door for more potential Fed rate cuts to stimulate the economy.
It’s a murky line as to what the data will represent; a too-high NFP headline figure shows strength in the jobs market, however, closes the door for a case to be made for more potential rate cuts.

If we were to see surprisingly strong employment data with NFP coming in much higher than expected, and the Unemployment rate hovering around it’s current level or slightly declining, then we could expect to see strength in the dollar and yields with weakness following in US stocks as traders price in less cuts for 2025.
If we were to see NFP decline much more than is expected, there’s a likelihood to see strength in US Stocks and weakness in the dollar and bond yields as traders hope to see the potential for more rate cuts for 2025.

Commentary
Wells Fargo
While it looked like payroll growth was finding its footing at the end of last year, the terrain has turned rocky again. We estimate nonfarm payrolls rose 140K in March, well below the current three-month average of 200K.

Federal employment is expected to drop by 15K in March due to layoffs and a hiring freeze, following a 7K decline in February. A court has since ordered reinstatements, but concerns over federal funding and economic policy have weakened private-sector hiring, with small business hiring plans returning to pre-election levels.

The unemployment rate likely remained at 4.1%, supported by household employment gains. Hiring risks are skewed upward, but slower labor supply growth should keep unemployment stable. Wage growth is expected to rise 0.3% in March, consistent with the past year’s trend.

Unicredit
The US labor market has remained resilient despite weaker consumer and business survey data, but the March employment report may narrow this gap. Nonfarm payrolls are expected to rise by 130K, below the 200K three-month average, due to federal job cuts (~20K), a hiring freeze, and private-sector hiring slowdowns driven by tariffs and policy uncertainty.

The unemployment rate is projected to increase to 4.2%, though lower immigration may slow further rises. The U6 underemployment rate, which spiked to 8.0% in February, will be closely watched. Average hourly earnings are expected to grow by 0.3% month-on-month.

Société General
We anticipate a 170,000 increase in non-farm payrolls for March. This growth rate is faster than earlier in the year but aligns with the job growth pace expected throughout 2024. Employment growth accelerated late in 2024, and the slower growth projected for early 2025 may reflect a correction to the rapid pace observed just months prior.

Uncertainty regarding fiscal policies, particularly tariffs and, to a lesser extent, cuts made by the Department of Government Efficiency (DOGE), may be hindering or delaying some hiring plans. Importantly, layoffs, which are typically indicative of recessions, remain very low. In the past week, initial jobless claims totaled 224,000, consistent with recent weeks. Federal unemployment benefits have declined. While federal employment cuts are frequently reported, many affected workers may remain on payrolls until September.
If they do not secure new jobs by then, they could become eligible for unemployment benefits and be counted as unemployed in the monthly employment reports.

Previous Release
On March the 7th at 08:30 ET, the BLS released the US NFP numbers for February
Headline NFP came in at 151k, on expectations of 160k, higher than the downwardly revised prior of 125k.

The Unemployment Rate came in higher at 4.1%, when it was expected to remain unchanged at 4%.

The higher unemployment rate fed into the idea that the Fed may lower rates in order to stimulate the jobs market, which caused strength in US stocks.
However, the headline NFP number coming in higher than the previous, even though it was lower than expected, worked against this, which caused a smaller move to the upside in the dollar and bond yields as well, as it pointed to a relatively healthy jobs market.

Overall, the report showed no warning signs in the employment situation, and resulted in a bullish reaction across US assets.