NFP should eke out a modest gain of 50K jobs in March – Wells Fargo

On Friday, the US March employment report is due. According to analysts at Wells Fargo, employment data won’t reflect the full-coronavirus outbreak. They expect an increase in payrolls of 50K. 

Key Quotes: 

“Nonfarm employment should eke out a modest gain of 50K jobs in March. Consensus calls for a 100K drop.”

“The virus-related impact on hiring will be large and far-reaching. But since the BLS survey week (period including the 12th of the month) was just before drastic containment efforts took effect across the country. March employment should be largely spared. Employment will tank in April.”

“Secondary labor market indicators remain mixed, though most are lagging and therefore of limited use. Initial jobless claims emphasize the magnitude of virus-related job losses. We expect the labor market to shed millions of jobs in the second quarter as economic activity comes to a stand-still.”

“The unemployment rate likely remained unchanged at 3.5% in March. But be prepared for it to more than double in April. We expect average hourly earnings rose 0.2% month-over-month in March.”

“As industries grind to a halt and businesses are forced to temporarily close their doors, we expect the labor market to shed millions of jobs in the second quarter. As such, the unemployment rate is expected to more than double as early as next month.”