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Look forward to April 1, 2019 week: Retail and employment bookend the week

The April 1 week is not particularly crowded with economic data releases, but most of those on the calendar will get careful attention.

Pride of place will go to the Employment Situation for March at 8:30 ET on Friday. The February report headline had a meager increase of 20,000 in nonfarm payrolls, but the rest of the data looked solid, especially the 3.4% year-over-year rise in average hourly earnings.  March payrolls should put to rest any worries that there has been a sustained and/or significant deceleration in the pace of job adds. Most Fed policymakers would say that an increase north of the 100,000-mark would be sufficient to absorb new entrants into the workforce. At this stage of maturity of the expansion, some hiring may be limited simply because they aren’t enough qualified workers to fill the open spots. The unemployment rate of 3.8% in February is consistent with a tight labor market and a chance for marginalized workers to find jobs as established workers switch positions in search of higher pay.

The ADP National Employment Report for March at 8:15 ET on Wednesday will provide a strong hint if the number of workers added to private payrolls is still rising at a robust pace. The February report hinted that overall payroll gains were not quite as strong, but that may in part have been due to the partial federal government shutdown and delays in hiring for government contracts.

The Challenger report on job cut intentions for March at 7:30 ET on Thursday is expected to show the number of layoffs announced fell sharply after the one-time upswing related to widespread layoffs related to the military. Outside of a few one-offs associated with particular industry restructuring and the on-going contraction in the retail sector, the numbers of layoff plans remain quite low in the historical context. Businesses are holding on to workers to meet demand.

Initial jobless claims at 8:30 ET on Thursday will be fore the week ended March 30. With many school districts on spring break, some workers in education services will be added to the rolls, although the seasonal adjustment factors should widely account for this. There may also be workers applying for benefits in areas affected by the massive floods in Nebraska and neighboring states.

Second in importance to the employment report are the numbers on retail and food sales in February at 8:30 ET on Monday. The Census Bureau is nearly caught up after delays in this report. Sales of motor vehicles were slightly lower in February from January, but sales of in the more expensive light truck category outpaced those for passenger vehicles, so the dollar value may not be too different month-to-month. Gasoline prices were on the upswing in February from January which could help boost the total. A bout of bitter cold weather and a couple of big snowstorms may have helped clear out winter merchandise in department and apparel stores.

Business inventories at 10:00 ET on Monday will only be through January. However, it will be a look at how the change in inventories may affect growth in the first quarter.

Sales of motor vehicles in March will be reported as available on Monday. With the arrival of tax refunds and signs of generally higher wages, consumers may have been more in the mood to purchase a new vehicle in the month.

The ISM Manufacturing Index is at 10:00 ET on Monday and the ISM Non-Manufacturing Index is at 10:00 ET on Wednesday. Regional surveys for the factory and service sectors have been somewhat mixed for March. On net, both suggest that the March headlines for the ISM numbers will be down-to-flat. For the most part activity has improved since the end of the partial government shutdown in late January, but that does not change that there was a sharp reset to a less hectic trend late in 2018.

The advance data on new orders for durable goods in February at 8:30 ET on Tuesday is likely to be another lackluster report. Manufacturing activity has been modest at best overall. The transportation component – which has kept some months from showing a month-to-month decrease – is not going to be terribly supportive in February. In spite of an air show in the month, Boeing reported a scant total of 5 new bookings, down 41 from the prior month.

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