I’d say traders’ focus will turn to the US labor market this week, but that’d be inaccurate. Price action across assets will continue to turn on war headlines and specifically Donald Trump’s social media posts — his “truths,” if you can stand the irony.
That said, it’s jobs week and the BLS still retains enough in the way of credibility to hold investors’ interest, at least for its flagship report.
Consensus expects to hear the US economy added 55,000 jobs on net in March, as bad weather abated and health care hiring normalized following strike activity.
Not that the macro mavens among you need a reminder, but the first read on February hiring showed a 92,000 net lob loss, among the worst readouts since the pandemic. It’ll be interesting to see whether (or, more aptly, by how much) that’s revised and in which direction.
As the figure reminds you, the labor market in Trump’s second term exhibits notable “chop,” adding jobs one month only to shed them the next. It’s fair to ask if that’s a function of uncertainty generated by his mercurial policymaking.
The unemployment rate, which nearly rounded to 4.5% in February’s release (a bad optic made worse by falling participation), is seen holding at 4.4% on Friday.
It’s tempting to reiterate the boilerplate copy about employers being as reluctant to fire as they are to hire, but according to Challenger, January saw the most job cut announcements for any first month since 2009. That series mercifully abated in February, but the jury’s still out, and there’s still palpable concern around the longer run read-across of AI for white-collar employment in America. Suffice to say the Challenger update will be eyed with interest on Thursday.
ADP’s due Wednesday. Economists are looking for a 40,000-gain there. Recall that the February read on ADP private hiring made for a stark contrast with the BLS’s tally of private payroll “growth” — +63,000 versus negative 86,000.
The BLS is finally back on schedule with JOLTs. Tuesday’s release will tell investors how many job openings there were across the US economy as of the last business day of February. Or, more poignantly, how many open positions there were on Ali Khamenei’s last full day among the living.
It’s too early for the jobs data to pick up the war in any meaningful way, but the narrative certainly has incorporated the conflict. The concern, in a nutshell, is that energy costs have reset higher and are unlikely to recede to pre-war levels even if America’s involvement winds down.
Paying those higher costs, including and especially at the gas pump, could eat away at discretionary spending, thereby eroding ex-energy aggregate demand, which’ll eventually manifest as (more) job losses.
The Census Bureau will release retail sales data covering February on Wednesday. That release is expected to show a 0.5% gain for headline nominal spending and a shallower gain for spending excluding cars and gas. The three-month average annualized pace for the control group — which is what counts for GDP forecasting — slipped to just 2.4% in January, the most tepid pace since April of 2024.
Also on deck in the US this week: Conference Board confidence for March (seen falling to 88, the lowest since “Liberation Day”), Case-Shiller home prices and remarks from Jerome Powell, who’ll speak at Harvard. The S&P’s riding a five-week losing streak, 10-year yields are up ~50bps since the start of the war and gas prices are up around 35%.
“The second-order impact from the war in the Mideast [is the] most meaningful wildcard for 2026,” BMO’s Ian Lyngen and Vail Hartman remarked, noting that in the end, “the outlook for real spending will depend more on the employment landscape and consumers’ sense of job security” than it will the price impact from the supply shock.
“Sentiment is surely waning,” Lyngen went on. “After all, over the last year, we’ve seen the trade war, government shutdown, budget deficit jitters, Fed independence struggles, private credit concerns, worries about overseas sponsorship for Treasurys, questions of the dollar’s standing as the reserve currency, and now a war in the Mideast.”
Somewhere, Donald Trump asked, “What’s your point?”
