Nonfarm Payrolls Rebounded in March
We start a new trading week with our eyes and ears trained on the Middle East once again. President Trump has expressed frustration (if excessive profanity is any indication) with the Iranian regime, and is giving until Tuesday to open the Strait of Hormuz completely. Otherwise, the U.S. plans to bomb Iranian infrastructure targets extensively. Experts say this would only escalate oil prices in the global marketplace.
Currently, WTI spot oil prices are hovering around $110 per barrel (/bbl), with Brent crude around $108/bbl. An escalation of violence in and around Iran (it would respond, no doubt, by hitting energy targets in U.S.-friendly countries in the region) could see oil prices continue to climb upwards of $130/bbl, which would be problematic on the inflation front, to say the least. Oil prices have already risen over +90% since the start of the year.
Pre-market futures are off early-morning highs at this hour, but mildly mixed. The Dow is -64 points, -0.14%, the S&P 500 is +4 points, +0.08%, the Nasdaq is +95 points, +0.39%, and the small-cap Russell 2000 — the only major index still in the green year to date — is -1.8 points at this hour, -0.07%.
Good Friday’s Good BLS Jobs Report
On Friday, despite stock markets being closed in observance of Good Friday, the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) came out for the month of March. Headline was a surprisingly high +178 — nearly 3x the expected +60K. The Unemployment Rate dipped -10 basis points (bps) month over month to 4.3%.
As we saw in last Wednesday’s private sector jobs reports from ADP (ADP), Healthcare jobs led the way: +78K on BLS, with +54K of these in the ambulatory healthcare services space (outpatient and other ex-hospital nursing, etc.). We also saw the return of healthcare workers from a strike the prior month. Construction was next, at +26K, followed by Transportation and Warehousing, +21K. The Federal Government dropped -18K jobs for the month, with Financial Services -15K.
Revisions to the prior two months only dipped -7K, but they did so in a fairly volatile manner: January saw +34K added to its BLS tally, to +160K — second-highest since December 2024, behind only this latest +178K reported. February, on the other hand, dropped -41K jobs from its original reported figure to -133K, the lowest since -140K in October of last year.
Average Hourly Earnings dropped to +0.2% in March, the lowest since December. Year over year, this figure lowers to +3.5% — the slimmest earnings growth since May 2021. These are good numbers for keeping inflation lower on the labor market side, but worse for consumers’ “power of the purse.” Labor Force Participation, at 61.9%, is the lowest since November 2021, and the U-6 (aka “real unemployment”) bumped up +10 bps to +8.0%.
What to Expect from the Stock Market
After the opening bell today, we’ll see ISM Services figures for March. These are expected to come down to +55.4% from the prior month’s +56.1%, but remain a healthy level above the 50-threshold, which determines growth in the services sector.
Later this week, we’ll see some of the most important remaining economic reports for the month, including a delayed Personal Consumption Expenditure (PCE) print for February on Thursday and Consumer Price Index (CPI) results for March on Friday. PCE is expected to remain flat or come down slightly: +2.8% headline year over year, +3.0% on core. CPI, on the other hand, looks to reflect the early impact of new inflationary pressures on the market: +1.0% month over month from +0.3% the previous month, +3.3% year over year, from +2.4% prior.
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