US: Weather conditions to impact March NFP - Danske Bank

According to analysts from Danske Bank, the March jobs report could show a slowdown but they note, that it is not a cause for concern, because numbers might be affected by weather conditions. 

Key Quotes: 

“The jobs report for March due on Friday will probably exhibit a slowdown in job growth compared to February. Although we believe that we will see continued progress in the labour market going forward, the March figures will probably be significantly affected by the severe weather conditions. We estimate non-farm payrolls increased by 160,000 in March, a bit below the consensus estimate of 175,000. We continue to expect the service sector to be the main driver of job creation and expect it contributed 160,000 new jobs.”

 “The Fed has continuously highlighted that developments in the labour market are a crucial determinant of the Fed hiking pace. Even if we get a disappointing jobs report for March, we believe the Fed will be relatively calm about the state of the labour market.”

“The reports for both January and February were very strong and there are no signs of a general turn for the worse. Although our economic models suggest that we will see a deceleration in economic growth during Q2, this is does not imply that the labour market is in for a turn. Thus, we continue to believe that there will be progress in the labour market.”

“We expect the Fed to hike two more times this year, in July and December, as the Fed seems less worried about inflation and has increased its weigh on labour market and growth data.”