Nomura: The U.S. non-farm payrolls in March are expected to slow to 110,000, with the unemployment rate rising to 4.2%
Nomura expects that the growth of non-farm payrolls in the U.S. in March will slow to 110,000, with the unemployment rate rising to 4.2%. Due to a slight increase in the number of unemployed, government employment may experience negative growth. Although the labor market is cooling, the fundamentals remain healthy, which is expected to support consumer spending. In recent months, unemployment-related indicators have risen, with initial jobless claims increasing and labor demand stabilizing
According to the Zhitong Finance APP, the U.S. non-farm payroll report for March will be released on Friday. Nomura expects that the growth in non-farm employment may slow from the previous 151,000 to 110,000 in March. The bank anticipates that the federal hiring freeze and the slowdown in employment growth at the state and local government levels may lead to negative growth in government employment.
In its latest report, the bank pointed out that the U.S. unemployment rate is expected to rise to 4.2% in March due to a slight increase in the number of unemployed individuals.
The increase in the number of workweeks and robust average hourly earnings (AHE) growth should drive a rebound in total wage income, thereby supporting consumer spending and household financial conditions.
The labor market is cooling, but the fundamentals remain healthy. We believe this should keep the Federal Reserve focused on the risks of rising inflation.
Nomura expects the growth in non-farm employment in March to slow to 110,000, which would be the lowest monthly reading since October 2024, bringing the three-month average slightly below 130,000.
In recent months, unemployment-related indicators have gradually risen, which will continue to exert moderate upward pressure on the unemployment rate. Initial claims for unemployment benefits have risen from winter lows, including a higher figure of 243,000 recorded at the end of February. In last month's household survey, the number of individuals in short-term unemployment and the overall flow of workers transitioning from employment to unemployment have both increased.
The report noted that labor demand has stabilized in recent quarters. The ratio of JOLTS job vacancies to unemployed workers rose to 1.13 in February, the highest level in eight months; the median and average duration of unemployment have both decreased recently