US labor market to show further improvement in March

The Bureau of Labor Statistics' (BLS) update on the employment situation is expected to show that labor market conditions improved further in March. A low level of persons filing initial claims for unemployment insurance during the reference period, combined with a decline in the total number of persons collecting unemployment benefits, suggests that nonfarm payrolls to expanded by 272,000 in March.

According to Societe Generale this would mark only a modest slowdown from the 295,000 jobs created in February and it would roughly match the reported YTD average of 267,000. Their in-sample estimates also suggests that previously reported data is likely to revised higher by a total of 75,000k.

The erosion in labor market slack likely paused in March with the unemployment rate expected to hold steady at 5.5% after declining by 0.2% in February. With the February canvassing period terminating before the 15th of the month, the closely followed nominal compensation measure probably edged just 0.2% higher last month, keeping its year-to-year growth rate unchanged at 2.0%. The mean work span of all employees is expected to hold steady at 34.6 hours.