NFP: Penciling in a 675K jump in payrolls – Wells Fargo

Next Friday is Non-farm payroll day. Market consensus shows an increase in March payrolls of 655K. Analysts at Wells Fargo expect a reading of 675K and the jobless rate to drop to 6.0%. 

Key Quotes: 

“While many parts of the economy have rebounded swiftly, the labor market has been slower to get back on its feet. During his testimony before the Senate this week, Fed Chairman Jay Powell responded to a question about the fact that the Fed's own forecast showed only an incremental decline in the unemployment rate. He explained how a wave of hiring later this year would likely result in a rise in the participation rate as discouraged workers were drawn back into the labor force.”

“After the sector was devastated by the pandemic, leisure & hospitality will likely be the biggest driver of job growth this year, and we suspect we may see the first glimpse of that when the March jobs number hits the wire on Friday morning. In fact, we are penciling in a 675K jump in payrolls for the month, and expect to see the jobless rate dip to 6.0%. It may be early yet for the job growth to lure more people back into the labor force, even though we agree with the Fed that strong job growth might be accompanied by a comparatively steady decline in the unemployment rate.”