Friday’s jobs report could eliminate market’s recession fears

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Economists also expect an average hourly wage increase of 0.3 percent and an unchanged unemployment rate at 3.8 percent, when the report is released at 8:30 a.m. ET Friday, according to Refinitiv.

Companies seem to have done a lot of hiring in March, and if Friday’s jobs report is as strong as expected, it could go a long way towards reducing speculation that a recession is coming and that the Fed will have to cut interest rates to stop it.

“This is one of the numbers that’s going to help shape market expectations for what the Fed needs to do and where the economy is going,” said Societe Generale senior U.S. economist Omair Sharif. Sharif is forecasting 200,000 jobs.

Like every jobs report, this one is important, but economists say even more so, after the stunningly weak February report, with just 20,000 jobs created. That data added to growing concerns this winter that the economy could tip into a recession sometime in the next year. But economists believe that report was an anomaly, and the real pace of job growth is closer to the consensus forecast for March of 175,000 payrolls, according to Dow Jones.

“It’s an important number. I will wave an all clear banner if the number’s good,” said Michael Gapen, chief U.S. economist at Barclays. Gapen expects 175,000 jobs, wage growth of 0.2 percent and a lower unemployment rate, at 3.7 percent.

The number of economic reports that fell short of expectations have far surpassed the ones that were better, and the Citi Economic Surprise index, which tracks the difference between them, fell to its lowest level since June, 2017.

Economists have been blaming February’s job weakness and the uneven quality of first quarter data, in part, on the five-week government shutdown and brutal winter weather in January and February.