Wall Street Awaits Labor Market Data

We begin a new week of trading rather quietly, though we expect things to get noisy as the days pass. This is the latest “Jobs Week,” with a full compliment of employment reports - JOLTS figures for February tomorrow, private-sector payrolls from ADP ADP Wednesday, Weekly Jobless Claims Thursday and March’s non-farm BLS Employment Situation Friday - by the final closing bell on Good Friday.

Despite news reports that the Iran War is nearing its end, there is scant evidence currently to support it. A 15-point peace plan has already been rejected by Iran, while the Strait of Hormuz remains closed off to 20% of the world’s crude oil supply, keeping oil and gas prices elevated. This morning, WTI has surmounted $100 per barrel (/bbl), +1.3%, while Brent crude is hovering +1.8% at this hour, to $114/bbl.

The open secret here is that the longer this conflict continues without an opening of the Strait, the more damage this will do to the global economy. Thus, regardless what jobs numbers hit the tape this week, market sentiment will largely be tethered to developments (or lack thereof) in the Persian Gulf.

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Bargain buyers have entered the market this early morning, and major indexes are benefiting at this hour. The Dow is up +345 points, +0.76%, while the S&P 500 is +50 points, +0.79%. The has grown +173 points since trading started this morning, +0.74%, and the small-cap Russell 2000 is +25 points, +1.03%.

Expectations for Jobs Week

The Job Openings and Labor Turnover Survey (JOLTS) report Tuesday morning is expected to tick back up toward its year-plus range around 7.0 million job openings. This figure had dropped to a 5-year low back in December, at 6.55 million open jobs. (We leaked in March 2022 at +12.1 million openings.) But our “low fire/low hire” labor climate may keep rates down to where they were -re-Covid era. This is something to keep an eye on.

Private-sector payrolls from Automatic Data Processing ADP on Wednesday morning look to post their fourth-straight month in positive territory. The previous month’s +63K, while still much cooler than we were with job gains a couple years ago, was the highest tally since July of last year. Without significant job gins in the public (government) space, private-sector payrolls would need to reach closer to 100K new jobs per month to keep up with the number of retirees per month.

Weekly Jobless Claims have been the most well-behaved of all employment prints of late, and thus they have been the lease representative of labor market strain going back a year or more. Initial Claims haven’t broached 220K since early February. Continuing Claims, reporting a week in arrears from new claims, hit its lowest level in more than two years last time around. To judge purely by jobless claims, we have a sound and steady labor market presently.

Friday’s Employment Situation for March looks to bounce back with +45K new jobs filled, following a -92K loss overall in February. The Unemployment Rate is expected to tick up 10 basis points (bps) to +4.5%, which would be the highest level since +4.7% reached in September of 2021. Last month’s negative tally was the fifth sub-zero jobs headline in the past nine months.

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