US employers probably tempered their hiring in March, just as consumers grow increasingly cautious and the economic outlook dims on concerns about the fallout from higher tariffs.
Payrolls rose by 1,38,000, below the 1,51,000 increase a month earlier, according to the median projection of economists surveyed by Bloomberg. That would leave average job growth over the past three months at the slowest pace since October. The unemployment rate is seen holding at 4.1 per cent.
The latest report card on the labour market follows data that indicate a notable first-quarter slowing in the economy. Personal spending barely rose last month after a January slump, disposable income growth remained soft and March consumer sentiment sank on fears of mounting inflationary pressures.
Shortly after Friday’s jobs data, Federal Reserve Chair Jerome Powell will discuss the economic outlook. Other Fed governors, including Adriana Kugler, Philip Jefferson, Lisa Cook and Michael Barr, are also due to speak in the coming week.
Anxiety is building among households and businesses about President Donald Trump’s aggressive trade posture. Trump on Wednesday is expected to unleash his biggest tariff salvo to date — a package of blanket increases in duties on foreign imports.
The US administration is seeking to reverse trade imbalances, spark investment in the US and spur the domestic output of critical goods and materials.
What Bloomberg Economics Says:
“Our baseline is that the actual tariffs will be substantially lower than the worst-case scenario, that many will be implemented only after investigations, and that some countries will receive exemptions. Still, after the dust settles, effective tariffs on US imports could be around 15 per cent next year, the highest in almost a century. Facing clear upside risks to inflation, the Fed looks set to hold rates steady. The real risk is that, if the labour market does turn, rate cuts will come too late.”—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou & Chris G. Collins, economists.
With consumer spending and confidence sliding, any notable weakening in job growth would raise additional concerns about the economy’s prospects. Economists are also parsing business survey data for signs that more companies are putting expansion plans on ice until there’s greater clarity on policy.
On Tuesday, the Institute for Supply Management will issue its March manufacturing survey, followed two days later by its report on services activity. S&P Global will put out similar releases.
Meanwhile, still-elevated inflation and the risk of a tariff-related increase in goods prices explain why Fed policymakers are in no rush to resume lowering interest rates.
In Canada, with an election campaign underway and the full brunt of Trump’s tariffs about to be felt, data for February may show exports to the US starting to slow after a surge in December and January, as exporters tried to front-run those measures.
Even if the momentum continued into February, the Bank of Canada expects this pull-forward in exports to foreshadow weakness ahead. The labour force survey for March will also offer insight into the fallout on hiring.
Elsewhere, policymakers around the world will be watching for Trump’s tariff announcements. Central-bank decisions from Australia to Colombia may result in unchanged rates, while crucial inflation data in the euro zone will be a highlight.
Asia
Asia kicks off the week with industrial output from South Korea and Japan on Monday. Japan will publish retail sales and housing starts figures the same day, with Thailand posting trade numbers.
On Tuesday, a number of economies, including Japan, South Korea, Thailand, Taiwan and Vietnam report factory activity data. China’s Caixin manufacturing PMI will show if the government’s stimulus in early March bolstered economic growth.
Investors in Australia will look out for home price data on Tuesday, which is likely to show the impact of the central bank’s first rate cut in four years, made in February.
Later in the day, the Reserve Bank of Australia will announce its next rate decision, with markets and economists expecting no change.
Also on Tuesday, the Bank of Japan releases its closely-watched quarterly Tankan survey, which is expected to show sentiment among large manufacturers staying positive. A key data point will be those companies’ estimate for capital investment in the fiscal year from April. South Korea publishes one of the earliest looks into trade globally for March.
On Wednesday, Indonesia, Malaysia, the Philippines and India will see manufacturing PMIs. South Korea publishes inflation data for March and New Zealand reports house price data.
Thursday will see PMIs from Singapore, Australia and China. To end the week, Japan, Australia and Singapore will get data on consumer spending and Thai inflation data will show if consumer prices stayed within the central bank’s target in March for a fourth month.
Europe, Middle East, Africa
Tuesday’s euro-zone consumer-price report may be the most watched for months. The outcome will provide officials with one of the final pieces of hard data before a decision in April on whether to cut rates that appears wide open.
In Germany, inflation probably slowed to 2.4 per cent, while economists reckoned it quickened slightly in Italy, to 1.8 per cent. Those readings are due on Monday, a day before the region’s overall results, which economists forecast will show a slight weakening, to 2.2 per cent.
Other data of note include German factory orders, plus French and Spanish industrial production, all scheduled for Friday.
While those reports will inform policymakers, central banking officials will also weigh Trump’s tariff announcement. Minutes of their previous decision, possibly pointing to their thinking on the fallout, will be published on Thursday.
European Central Bank President Christine Lagarde and her Executive Board colleagues Philip Lane and Isabel Schnabel are among officials on the calendar to speak in the coming week.
Also of note in the euro zone may be credit-assessment reports on two of the region’s most indebted countries. Reports on Italy by Fitch Ratings and on France from Scope Ratings could be published after the market closes on Friday.
Key inflation data are also due outside the euro region:
- In Switzerland on Thursday, economists predict a slight pickup in the March reading for annual consumer price growth, to 0.4 per cent.
- The same day in Turkey, forecasters expect inflation to have slowed slightly last month, to 38.9 per cent. It’s unclear if market turmoil and political unrest after the arrest of Istanbul’s mayor have yet filtered into the data.
- Sweden will release inflation figures on Friday, with the CPIF measure targeted by the Riksbank anticipated to weaken to 2.6 per cent.
Following a busy week in the UK featuring several key data releases and Chancellor Rachel Reeves’s fiscal statement, the coming days feature fewer calendar items. Bank of England policymaker Megan Greene will speak on Tuesday.
Among rate decisions scheduled, Poland’s central bank is expected to keep borrowing costs unchanged on Tuesday as high inflation persists.
In Tanzania on Friday, officials may leave their key rate at 6 per cent to support the shilling, the world’s worst-performing currency so far this year.
Colombia’s new finance minister, German Avila, and two new board members named by President Gustavo Petro join the central bank’s rate-setting meeting on Monday.
Avila has been vocal about the need for much bigger cuts, and some economists expect the new officials to be more receptive to arguments for faster monetary easing.
But sticky inflation and expectations may sideline BanRep for a second meeting, with the key rate held at 9.5 per cent. Minutes of the deliberations are published late Thursday.
In Peru, the March consumer-price report for the megacity capital of Lima may show inflation slowed to 1 per cent or lower, from 1.48 per cent.
A light data week in Argentina will be overshadowed by news of negotiations between the government and the International Monetary Fund for a new agreement totaling roughly $20 billion, which was tipped by Economy Minister Luis Caputo on Thursday.
In a similar vein, Mexico reports a smattering of secondary economic data while all eyes stay focused on a far larger issue: Trump’s 25 per cent tariff on auto imports from the country are slated to go into effect.
Chile reports seven separate February indicators, including copper production and GDP-proxy data.
Brazil in the coming week posts tax and budget figures, monthly trade, the central bank’s expectations survey and industrial production. Output has been flagging, and uncertainty about future US relations, tariffs and fiscal constraints represent headwinds ahead.
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