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Jobs report, bull market turns 10 — What to know in the week ahead

Heidi Chung

On the back of better-than-expected GDP growth during the fourth quarter of 2018, market participants will get a look into the health of the U.S. labor market on Friday, March 8 when the Bureau of Labor Statistics releases the February jobs report.

Economists polled by Bloomberg are forecasting that the U.S. economy added 185,000 jobs during February, down from the 304,000 jobs added in January. The unemployment rate is expected to tick down slightly to 3.9% from 4% last month.

While economists don’t quite see eye to eye on their predictions for the February jobs report, one thing that they do agree on is that the blowout January figure isn’t sustainable.

Bank of America Merrill Lynch economist Michelle Meyer is one of the most optimistic with regard to her forecast. “The February jobs report should be strong. We expect job growth of 210,000, the unemployment rate to decrease 0.2pp to 3.8%, and wage growth to reach a new cyclical high of 3.4%,” Meyer wrote in a note to clients on Friday.

Meanwhile, jobs added in the manufacturing sector will be closely watched in February’s report. Economists are expecting that the manufacturing sector added 10,000 jobs, down from the 13,000 jobs added in January. “One concern was a further slowdown in manufacturing jobs growth, suggesting that weaker global demand is weighing on the sector. Given the fall in the Markit manufacturing employment index, that trend looks to have continued in February,” Capital Economics wrote in a note Friday.

UBS remained the most pessimistic about February’s jobs number. “For February, we expect job growth to slow sharply to 175k from last month’s torrid 304k pace,” the bank wrote in a note Friday. “the strength of employment over the past three months, 241k, likely substantively overstates the level of recent activity.”

A chart on a screen on the floor of the New York Stock Exchange shows the rise of the S&P 500 index since 2009. (AP Photo/Richard Drew)

Friday also marks a historic day for the market. It is the tenth anniversary for the longest bull market on record. On March 9, 2009, the S&P 500 (^GSPC) bottomed out at 676.53. Investors have been richly rewarded since then, the S&P has rallied a whopping 312% since then.

Economic calendar

Monday: Construction Spending month-on-month, December (+0.2% expected, +0.8% prior)

Tuesday: Markit US Services PMI, February (56.2 expected, 56.2 prior), Markit US Composite PMI, February (55.8 prior), ISM Non-Manufacturing Index, February (57.3 expected, 56.7 prior), New Home Sales, December (589,000 expected, 657,000 prior), Monthly Budget Statement, January ($3B expected, -$13.5B prior)

Wednesday: MBA Mortgage Application, week ending March 1 (5.3% prior), ADP Employment Change, February (190,000 expected, 213,000 prior), Trade Balance, December (-$57.3B expected, -$49.3B prior)

Thursday: Initial Jobless Claims, week ending March 2 (225,000 expected, 225,000 prior), Continuing Claims, week ending February 23 (1.762 million expected, 1.805 million prior), Bloomberg Consumer Comfort, week ending March 3 (61.0 prior)

Friday: Building Permits, January (1.280 million expected, 1.326 million prior), Housing Starts, January (1.190 million expected, 1.078 million prior), Change in Nonfarm Payrolls, February (185,000 expected, 304,000 prior), Change in Manufacturing Payrolls, February (10,000 expected, 13,000 prior), Unemployment Rate, February (3.9% expected, 4.0% prior), Average Hourly Earnings month-on-month, February (0.3% expected, 0.1% prior), Average Hourly Earnings year-on-year, February (3.3% expected, 3.2% prior)

Earnings calendar

Monday: Salesforce.com (CRM) after market close

Tuesday: Kohl’s (KSS), Target (TGT) before market open; Ross Stores (ROST), Urban Outfitters (URBN) after market close

Wednesday: Abercrombie & Fitch (ANF), Dollar Tree (DLTR) before market open; American Eagle Outfitters (AEO) after market close

Thursday: Burlington Stores (BURL), Kroger (KR) before market open; Costco (COST) after market close

Friday: No notable earnings reports scheduled

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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