March US hiring rebounds after February freeze
US employment likely saw a rebound in March following one of the most significant declines in payrolls since the pandemic, continuing a trend of fluctuating data. According to the survey ahead of Friday’s report, economists estimate that 60,000 jobs were added for the month following a decline of 92,000. The jobless rate is expected to remain unchanged at 4.4 per cent. Payrolls have not seen consecutive monthly increases since May of last year, reflecting a labor market that exhibits a lack of significant hiring momentum while also showing few indications of a troubling decline. Amidst the backdrop of constrained job opportunities, the conflict in West Asia has reignited American apprehensions regarding inflation as gasoline prices surge. Economists are anticipating a rebound in March payrolls following the underwhelming results of February, which may have been impacted by weather-related declines in construction, as well as in the leisure and hospitality sectors. Health care payrolls may also rise following the conclusion of a strike involving over 30,000 Kaiser Permanente employees.
Subdued employment growth and increased price pressures will challenge consumer resilience. Retail sales data set to be released on Wednesday are expected to indicate that demand remained resilient in February, with a notable recovery in automobile purchases. Economists project an additional 0.3 percent advance, excluding car dealers and gasoline service stations. Federal Reserve policymakers are considering the sustainability of demand and slight job growth in relation to the potential for an unwanted increase in inflation driven by rising energy prices. On Monday, Fed Chair Jerome Powell is set to engage in a moderated discussion at Harvard University, where he may provide insights into how he perceives the war influencing the balance of risks related to inflation and employment. Economics States: “We anticipate that March nonfarm payrolls increased by 80k, indicating a recovery in payrolls impacted by strikes, slow growth in private-sector hiring, and an ongoing decline in 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 anticipate the rate to remain at 4.4 percent.” In the upcoming week, the Institute for Supply Management is set to unveil its March manufacturing index, alongside various other economic reports. Economists predict the gauge will indicate a third consecutive month of expanding activity — marking the first occurrence of this since 2022.
In Canada, the gross domestic product data for January, along with February’s flash estimate, could indicate modest growth. A summary of the Bank of Canada’s deliberations is expected to provide insight into its decision to maintain interest rates at their current level. February’s merchandise trade report is expected to reveal a continued deficit in the context of ongoing US trade tensions. A virtual call will be held on Monday with the Group of Seven energy and finance ministers, as countries from the euro zone to South Korea prepare to release inflation data that reflects the effects of the war. Colombia’s central bank is poised to implement a significant rate increase. Asia’s data calendar will provide an initial insight into regional demand and activity, as the West Asia conflict casts a shadow over the global outlook and drives energy prices upward. The week commences with the Bank of Japan releasing a summary of opinions from its meeting held on March 18-19. India has published the industrial production data for February along with the year-to-date fiscal deficit figure. On Tuesday, focus will turn to Tokyo’s inflation figures for March, accompanied by labor market and retail data for February. The figures offer a crucial insight into price pressures and consumption as the Bank of Japan considers further normalization. The Reserve Bank of Australia has published the minutes from its March meeting, during which it implemented a second consecutive rate hike. Wednesday is pivotal, featuring Japan’s Tankan survey alongside a comprehensive array of manufacturing PMI readings throughout the region, building on the initial data released last week from several major global economies. The upcoming survey results encompass China, South Korea, Indonesia, and various Southeast Asian economies.
The data will provide an overview of factory activity following the US-Israel war on Iran, which has impacted energy supplies and caused gasoline prices to soar. Australia has released its building approvals data for February, highlighting an ongoing housing shortage. Meanwhile, Indonesia has provided its consumer price data and trade balance figures. On Friday, South Korea will release its inflation report for March, while Australia is set to unveil trade data, and India will publish its manufacturing PMIs. Data indicating that the euro zone experienced the largest inflation increase this month since Russia’s invasion of Ukraine in 2022 is anticipated on Tuesday. In the aftermath of the US attack on Iran, forecasters anticipate that consumer-price growth has increased by 0.7 percentage points, reaching 2.6 percent. The figures will include Germany’s report on Monday, France’s early the next day, along with Italy and an estimate for the remainder of the region. Throughout the week, several officials from the European Central Bank may respond to the reports. Consumer-price readings will also be released by other countries neighboring the euro area. In Poland, the inflation rate is observed to rise by 1.1 percentage points, reaching a nine-month high. Economists predict that in Switzerland, which has faced challenges in generating price growth due to the strength of the franc, there will be an acceleration to 0.5 percent on the national measure. That would be the quickest since 2024.
Italy’s final deficit measurement for 2025 is set to be unveiled on Friday, marking a crucial report that will determine if the nation has surpassed the European Union’s 3 percent of GDP threshold. France is set to release its industrial production figures for February on the same day. On Wednesday, the UK will release a record of the Bank of England’s latest Financial Policy Committee meeting, which may provide valuable insights into the volatility that has affected the gilt market this month. The BOE’s Decision Maker Panel report, which includes price expectations, is set to be released the next day. On Tuesday in Colombia, there is an emerging consensus that the central bank will implement a second consecutive 100 basis-point rate increase, raising the benchmark to 11.25 percent. 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 series of reports are expected from Brazil in the upcoming 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 serves as the country’s broadest measure of inflation.
Chile is set to release the minutes from the central bank’s policy meeting held on March 24, along with GDP-proxy data for February and figures on copper production. Officials maintained Chile’s key rate at 4.5 per cent as anticipated; however, the government’s 54 per cent fuel price increase driven by the Iran conflict could indicate that the next adjustment may be upward. The conflict poses significant challenges for the nation, as a slowdown in global growth is expected to negatively impact copper prices — its primary export — while simultaneously fueling inflation, considering that Chile relies heavily on imports for nearly all its fuel needs. Consumer prices data for Peru’s mega-city capital of Lima, released Wednesday, is anticipated to accelerate for a fifth consecutive month. A leak in a crucial natural gas pipeline in early March triggered Peru’s most severe domestic energy crisis in years, which, although short-lived, coincided with the surge in global fuel prices caused by the Iran war. The central bank has revised its year-end inflation rate projection to 2.4 per cent, an increase from the previous estimate of 2 per cent.
