FirstFT: US jobs market shows signs of cooling

A closely watched US labour market report is expected today to confirm that the jobs market is cooling after a rapid series of interest rate rises by the Federal Reserve.

The non-farm payrolls report is expected to show the US economy added 233,000 positions last month, according to a consensus forecast compiled by Bloomberg, compared with 311,000 jobs accrued in February and roughly 500,000 in January.

The unemployment rate is forecast to have steadied at 3.6 per cent, just above a multi-decade low. Wage growth, meanwhile, is poised to remain firm, with average hourly earnings up another 0.3 per cent in March. On a year-over-year basis, wages are set to have increased 4.3 per cent.

If the predictions are accurate, today’s data from the Bureau of Labor Statistics will confirm that the US labour market is cooling following a year-long campaign by the Fed to tighten monetary policy and cool inflation.

Payrolls is the latest survey to report on conditions in the labour market to be published this week. Yesterday, jobless claims figures, which track new applicants for unemployment aid, came in higher than expected and figures over the past 12 months were revised significantly higher as part of an annual review by the BLS.

A report from payroll processor ADP, released on Wednesday, showed private sector businesses in the US created 145,000 jobs in March, below forecasts of 200,000. A separate report from the Institute for Supply Management, released on the same day, showed activity in the vast services sector also cooled last month.

A Department of Labor survey, released on Tuesday, showed US job openings in February dropped below 10mn for the first time since May 2021.

The succession of weaker than expected economic reports this week has led to a rethink among investors about the outcome of the Fed’s next monetary policy meeting on May 2-3.

The yields on US government debt fell to their lowest level for seven months earlier this week as prices rose and equity markets crept higher.

The reaction to today’s non-farm payrolls report may be muted, however, as equity markets in New York will be closed for Good Friday and government bond markets will be open for a reduced number of hours.

Here’s what else is happening today:

• Good Friday: Pope Francis will hold mass in St Peter’s Basilica. US president Joe Biden and his wife, Jill, will spend the weekend at Camp David.

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Five more top stories

1. Israeli fighter jets bombed the Gaza Strip in the early hours of this morning after militants in Lebanon and Gaza fired a volley of rockets in retaliation for the forcible removal of Palestinian worshippers from Jerusalem’s al-Aqsa mosque. Read the full story.

2. EXCLUSIVE: JPMorgan Chase’s recent flurry of acquisitions is being scrutinised by US regulators in a review that includes a $175mn deal with a founder of a start-up who was criminally charged this week with defrauding the bank. Here’s why the lender’s due diligence on dealmaking is being audited.

3. The White House sought to blame a lack of preparation by the Trump administration for the chaotic withdrawal from Afghanistan in August 2021, in a 12-page report shared with Congress yesterday. The summary accused the former president of making a rushed deal with the Taliban.

4. Bank of America cut short an online client conference on geopolitics and apologised to attendees after some balked at what they saw as pro-Russian comments about the war in Ukraine. “It was more like Bank of Russia than Bank of America,” one attendee at the event told the Financial Times.

5. Italy’s former prime minister Silvio Berlusconi has leukaemia, his doctor revealed yesterday, as the 86-year-old remained in intensive care for a second day undergoing treatment for a lung infection. More on the country’s longest-serving postwar prime minister.

How well did you keep up with the news this week? Take our quiz.

News in-depth

As Northern Ireland marks 25 years since the signing of the Good Friday Agreement, which ended three decades of conflict, the historic deal still has much unfinished business. Political instability plagues a region unable to fully move on from its violent past.

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Additional contributions from Tee Zhuo, Emily Goldberg and Vita Dadoo Lomeli