This time, the release of US March NFP will be different for two reasons. First, as a reminder, it’s happening on Easter Friday when markets are closed. Any potential reaction would have to wait until Monday’s Asian session, but there, too, several key markets are closed as well. The rest of Europe was closed for the remainder of the session. Even if there are strong reactions in the markets it might take some time for the effect to be felt through the staggered market openings.
Analysts often underestimate the number of new jobs in the US. It has caused significant market swings and altered the outlook for the Fed’s future actions. Remember that last month’s surprise jobs number contributed to initial speculation the Fed would hike by 50bps before the implosion of regional banks. It seems like a long time ago.
Understanding the distortion
Since the pandemic, the US labor market has been significantly distorted. This has contributed to the difficulties economists have in predicting job numbers. Worse, the Fed is likely to be experiencing the same difficulties in deciding policy.