Synopsis:

SEB expects the March US employment report to reflect slower—though not dramatic—job growth, with a headline non-farm payroll increase of 110k. The labor market is seen as increasingly sensitive to shifts in demand, and risks stemming from federal employment cuts are expected to be limited in scope.

Key Points:

• Non-farm Payrolls:
  SEB forecasts a 110k increase, below the 135k consensus and 151k previous. The drag from federal job cuts remains unclear but is expected to be modest due to legal challenges and the sector’s small weight (1.5% of workforce).

• Sectoral Dynamics:
  Non-cyclical sectors (government, health, education) have consistently driven job growth. SEB notes that small business hiring intentions and job openings have weakened recently.

• Unemployment & Underemployment:
  SEB sees unemployment rising slightly to 4.2%, compared to 4.1% previously, as the labor market rebalances. No U6 forecast was provided.

• Wage and Hours Data:
  Hourly earnings growth is seen at 0.3% m/m and 4.0% y/y, in line with the previous month. No forecast was offered for average weekly hours or participation rate.

Conclusion:

SEB expects a cooling but resilient jobs report, reflecting the labor market’s sensitivity to slower demand. While federal cuts may cloud the picture, the broader labor outlook remains stable, supported by non-cyclical sectors. Wage growth remains solid, reinforcing expectations for ongoing disinflation without labor market collapse.