The big question for the April 1 week relates to the underlying conditions for the US labor market. Will the change in nonfarm payrolls in March close out the first quarter 2024 at a continued strong pace and will the unemployment rate remain consistent with a tight labor market?

Early forecasts for nonfarm payrolls in March look for an increase in the 175,000-200,000 range. So far for the first quarter 2024, the monthly average is 252,000 compared to monthly averages of 201,000, 216,000, and 212,000 in the second, third, and fourth quarters of 2023, respectively. A March increase toward the lower end of the forecast range would indicate that the underlying conditions reflect steady, healthy gains in jobs over much of the past year. Moreover, the unemployment rate has not topped 4.0 percent since January 2022. Changes of a tenth or two on a month-to-month basis are not significant and the unemployment rate has also been remarkably consistent in the past year. The rebalancing of labor supply/demand is being accomplished with a modest-to-moderate pace of hiring as labor supply eases somewhat and without triggering massive layoffs.

The March employment report tends to come in above the consensus forecast in the Econoday survey. However, there is also a tendency for March to subsequently be revised lower. The March report should not be affected by any special factors. There are no active strikes. Massive regional weather events or natural disasters have been absent. The report should need few caveats in interpreting the data.

This is the last employment report that Fed policymakers will have in hand before the next FOMC meeting on April 30-May 1. They will not see the monthly data for April which is set for release at 8:30 ET on Friday, May 3.

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