A look at what to expect in the March 2021 non-farm payrolls report

non-farm payrolls report unemployemnt rate
  • Consensus estimate +650K
  • Private +640K
  • February +379K
  • Highest estimate +1000K (3 estimates)
  • Lowest estimate +232K (Southbay)
  • Average estimate +671K
  • Standard deviation +155K
  • Unemployment rate consensus estimate: 6.0% vs 6.2% prior
  • Participation rate consensus +61.5% vs 61.4% prior
  • Prior underemployment U6 prior 11.1%
  • Avg hourly earnings y/y exp +4.5% y/y vs +5.3% prior
  • Avg hourly earnings m/m exp +0.1% vs +0.2% prior
  • Avg weekly hours exp 34.7 vs 34.6 prior

Here's the March jobs story so far

  • ADP +517K vs +550K expected
  • ISM services employment not yet released
  • ISM manufacturing employment 59.6 vs 54.4 prior
  • Initial jobless claims survey week 765K vs 847K in February
  • Conference Board help wanted online demand for hiring not yet released
  • Challenger Job Cuts 30K vs 34K prior

Non-farm payrolls is being released on Good Friday, which is an unusual situation because bond and equity markets will be closed. That will leave all the action in FX but London will be especially thin because it's a holiday there.

An important caveat is that the market isn't exactly hanging on employment right now. FOMC members have said they want to see it under 4% before they think about hiking and have also repeatedly emphasized that the low participation rate masks the current unemployment level, which is +9% when factoring that in.

The market is increasingly worked up about inflation but the wage numbers in this release are hard to trade around because they reflect changing compositions and adjustments due to the pandemic.

The straight-forward trade will be in USD/JPY and USD/CHF, which will rise on good numbers and slip on weak ones. Barring a huge surprise, I think that traders who choose to sleep through this one won't have any regrets.

If you're trading it, better weather and fewer restrictions point to a strong number and Homebase reported "significant improvements in March" particularly in entertainment and hospitality.

For another preview, see our friend Christophe Barraud's preview.