The Most Important Things People Will Be Watching for in Tomorrow's Jobs Report

Will March extend the red-hot pace of hiring?

April 3 is Jobs Report Day in America. It's also Good Friday, which means most of Europe will be out for the holiday, and the U.S. stock market will be closed. Economy watchers, though, are set to pore over the Labor Department's 8:30 a.m. release of March employment, among the most widely watched data in the world.

Here's what to look for in the report:

Payrolls

Economists surveyed by Bloomberg forecast payrolls probably climbed by 245,000 following a 295,000 increase in February. The U.S. has added more than 200,000 jobs each month for 12 straight months, the longest such stretch since 1995. Will March be different?

Recent economic data have been soft, and the ADP report on private hiring, which some people use to gauge the government's payrolls count, suggested on Wednesday that the 200K-plus streak may have run its course.

Not so fast, says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ.

"Let’s wait for the real show, however, on Friday, the real number from the Bureau of Labor Statistics,'' Rupkey, who predicts a 230,000 gain, said in a note. "Friday could be big, big news."

Wages

Few economists are holding their breath for a March breakout in wages. They predict a 2 percent year-over-year advance in average hourly earnings; it's been stuck around that level since the expansion began back in 2009.

Still, hopes are rising that the much-awaited pickup is drawing near, given the strong pace of payrolls and other measures that show the job market is tightening. There's some movement at the low end of the wage ladder, too. McDonald's Corp. this week became the latest to announce plans to boost worker pay above the minimum wage.

Unemployment rate

While the jobless rate probably steadied in March at an almost seven-year low of 5.5 percent, economists will look behind the numbers to details such as the participation rate and underemployment. They'll try to assess where the economy stands vis-à-vis full employment, or the point to which unemployment can fall without sparking higher inflation. That's important for when the Federal Reserve may begin to raise interest rates.

The Fed, meanwhile, has lowered its estimate for where the jobless rate will be in the long run, indicating there's still slack. The central bank's new range, issued after policy makers met in March, is 5 percent to 5.2 percent, down from the 5.2 percent to 5.5 percent it saw in December.

Chinks in the armor?

Nobody's disputing that the labor market is strong. At the same time, the U.S. is due for some reconciliation between a slower-growing economy and the "high flying labor market," though that may not necessarily happen in the March jobs report, according to Carl Riccadonna, Bloomberg Intelligence chief U.S. economist in New York.   

 The fallout from troubles in the oil patch, slower global growth and the stronger dollar, especially with respect to manufacturers, will also be things to look for in the jobs report. And maybe some hit from the weather, too, according to economists at Morgan Stanley.

 The likely market reaction to the data is not evenly balanced. A solid report signals "more of the same" for labor momentum, while a downside miss would throw a wrench into policy makers' conviction to move on interest rates around mid-year, Riccadonna said. "As goes the labor market, so too will go the Fed's liftoff plans."

For more, read this QuickTake: Monthly U.S. Jobs Report

Before it's here, it's on the Bloomberg Terminal. LEARN MORE