Wall Street ready for a long weekend, Jobless Claims confirms labor market weakness is here, Canada Jobs Impress

Wall Street looks like it is ready for both a long weekend and a nonfarm payroll report that will likely show labor market weakness is happening.  Stocks wavered most of the session as investors refrained from massive positioning before this shortened trading week wraps up. Some traders however don’t want exposure in case we get an upside surprise with the jobs report, just like Canada did today. 

Stocks settled higher as job softness and Fed Bullard’s comments suggest monetary policy is almost sufficiently restrictive enough and after tech stocks were led higher by Alphabet’s latest AI initiatives.

US Data

All the employment data leading up to the nonfarm payroll report has confirmed a clear trend that a labor market slowdown has begun. Friday’s payroll number is expected to show 230,000 jobs were created in March, with the unemployment rate remaining steady at 3.6%, while wages tick higher from a month ago, but cool down year-over-year from 4.6% to 4.3%.

– Jobless Claims exceed estimates as prior week massively revised higher

– The Challenger Report: Job cuts rise 15% m/m

– ISM Services Employment declined from 54.0 to 51.3

– ISM Manufacturing Employment weakened from 49.1 to 46.9 (lowest levels since July 2020)

– JOLTS Job Openings drop below 10 million for first time since 2021

For today’s data, the BLS noted that the methodology used to seasonally adjust the national initial claims and continued claims reflects a change in the estimation of the models.  Initial jobless claims, a proxy for layoffs, were 228,000, down from a significantly revised higher prior reading of 246,000.  This is clearly showing labor market weakness is in place.  Given all the layoff announcements we have heard across corporate America, the data finally appears to be showing up.

CAD

The Canadian dollar pared losses after the economy posted its seventh consecutive month of job gains.  The Canadian labor market remains robust, adding 34,700 jobs in March, much more than the consensus estimate of 7,500.  The unemployment rate held steady at 5.0%, expectations were for it to tick higher to 5.1%. Wage pressures however eased, slowing from 5.4% to 5.2%. 

artificial intelligence

The euro got a boost after President Xi said he will continue to drive peace talks between Russia and Ukraine.

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