Synopsis:

BofA expects a strong March U.S. employment report, driven by a rebound in leisure and hospitality jobs and stable labor market signals. If realized, this could challenge current market pricing for 2025 Fed rate cuts.

Key Points:

• Headline payrolls: Forecasted to rise by 185k, well above the 135k consensus, largely due to weather-related rebound in leisure & hospitality hiring.

• Government hiring: Expected to contribute 10k, though risks are to the downside.

• Unemployment rate (u-rate): Seen holding steady at 4.1%.

• Wage data: Average hourly earnings (AHE) expected to rise 0.3% m/m; average weekly hours (AWH) to tick up to 34.2 after weather distortions.

• Trend indicators: 3-month and 6-month averages projected at ~150k and ~180k, well above breakeven hiring estimates of 100–125k.

• Policy implications: Report should support the view that the labor market remains resilient, which—combined with sticky inflation—could lead markets to scale back 2025 rate cut expectations.

Conclusion:

If the March jobs report aligns with BofA's forecast, it would reinforce the narrative of labor market resilience and challenge dovish market pricing. The data could help offset concerns raised by weak February spending numbers and make it harder for the Fed to justify aggressive easing in 2025.