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Jobs, retail sales — What to know in the week ahead

Heidi Chung
Reporter

The highlight of the week will come on Friday when the Bureau of Labor Statistics releases the March jobs report. Economists are expecting that the labor market bounced back in March after a disappointing February jobs report.

The U.S. economy added a muted 20,000 jobs in February, but is expected to have added 178,000 nonfarm payrolls in March, according to economists surveyed by Bloomberg. The unemployment rate is anticipated to have stayed steady at 3.8%.

“We view the February weakness as largely transitory for two reasons: furloughed workers seeking temporary part-time employment and weather effects had both acted to pull forward employment growth into January and thus contributed to the subsequent weakness in February,” Barclays explained in a note on Friday.

“Fortunately, the U.S. economy is slowing from a fairly strong position. Employment growth has been fairly strong, unemployment is low and household balance sheets are relatively healthy,” Wells Fargo wrote in a note to clients on Friday. Wells Fargo economists are predicting that the U.S. economy added 160,000 new jobs during the month.

Capital Economics expects the better weather to boost March’s data but still remains rather cautious. “With the weather returning to seasonal norms in March, we’d expect some bounce-back in March employment,” the research firm wrote in a note on Thursday. “In all, we expect non-farm payroll growth to rebound in March, but only to around 150,000. That would suggest that, after averaging 220,000 in 2018, the average pace of monthly payroll gains is now trending lower. What’s more, we expect that slowdown to gather pace as the year progresses.”

In addition, retail sales data for February will also be in focus when it is released on Monday. Capital Economics anticipates that retail sales data for the month will illustrate a rebound. “We expect a further recovery in underlying retail sales in February, but that would still be consistent with consumption growth slowing substantially in the first quarter,” Capital Economics said.

However, Wells Fargo expects further weakness. “Consumer fundamentals have shown some signs of weakness. This morning we learned that income growth has been surprisingly weak, with personal income rising just 0.2% in February. Consumer confidence also slipped 7.3 points in March, indicating consumers have still not fully found their footing after the stock market selloff late last year.”

Economic calendar

Monday: Retail Sales Advance month-on-month, February (0.3% expected, 0.2% prior); Retail Sales excluding Auto month-on-month, February (0.4% expected, 0.9% prior); Retail Sales excluding Auto and Gas month-on-month, February (0.3% expected, 1.2% prior); Markit US Manufacturing PMI, March (52.5 expected, 52.5 prior); ISM Manufacturing, March (54.5 expected, 54.2 prior); ISM Prices Paid, March (51.3 expected, 49.4 prior); Construction Spending month-on-month, February (-0.2% expected, 1.3% prior)

Tuesday: Durable Goods Orders, February (-1.8% expected, 0.3% prior); Durables excluding Transportation, February (0.1% expected, -0.2% prior); Capital Goods Orders Nondefense excluding Air, February (0.1% expected, 0.8% prior)

Wednesday: MBA Mortgage Applications, week ending March 29 (8.9% prior); ADP Employment Change, March (175,000 expected, 183,000 prior); Markit US Services PMI, March (54.8 expected, 54.8 prior); Markit US Composite PMI, March (54.3 prior); ISM Non-Manufacturing Index, March (58.0 expected, 59.7 prior)

Thursday: Initial Jobless Claims, week ending March 30 (216,000 expected, 211,000 prior); Continuing Claims, week ending March 23 (1.756 million prior); Bloomberg Consumer Comfort, week ending March 31 (60.0 prior)

Friday: Change in Nonfarm Payrolls, March (178,000 expected, 20,000 prior); Change in Manufacturing Payrolls, March (10,000 expected, 4,000 prior); Unemployment Rate, March (3.8% expected, 3.8% prior)

Earnings calendar

Monday: N/A

Tuesday: Walgreens Boots Alliance (WBA) before market open; GameStop (GME)

Wednesday: Signet Jewelers (SIG) before market open

Thursday: Constellation Brands (STZ) before market open

Friday: N/A

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

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