What To Expect From Friday's Jobs Report: Barclays Economist Breaks It Down

Benzinga · 03/10/2023 07:57

Barclays Vice President and U.S. economist Pooja Sriram reportedly said that the non-farm payrolls figure for February is expected to come in substantially lower than January but any number over 225,000 would still reflect a strong jobs print.

"We expect non-farm payrolls to come in at 225,000. That would be a substantial slowing from the blockbuster January print. But a number above the 225,000-handle would undeniably be still a strong jobs report,” Sriram told Bloomberg TV.

“What we will be looking at apart from the headline payrolls number would be what happens with the average hourly earnings. We are expecting a 0.3% increase on the month. That’s broadly in line with the increase in January.”

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U.S. markets ended in the red on Thursday dragged by a plunge in bank stocks and investor concerns ahead of the release of the jobs report on Friday.

Market participants remained concerned an unfavorable jobs report could spark more aggressive rate hikes by the Federal Reserve in the coming months. The SPDR S&P 500 ETF Trust (NYSE:SPY) closed 1.84% lower while the Invesco QQQ Trust Series 1 (NASDAQ:QQQ) lost 1.73%.

Rate Hike: Sriram also pointed out that the bar for a 50 bps rate hike by the Federal Reserve is now much lower.

"I think the burden of proof is such that we need to see a substantially weak payrolls data tomorrow, followed by maybe some softening in CPI next week to expect the Fed would go to 25 basis points and not 50," she said.

Talking about the economy, the economist said they have penciled-in negative growth in the second half of this year.

"We are looking for what we would call a mild recession. It’s around the same time that we expect inflation prints to also start cooling. We should see some cooling in shelter costs. All of this should make for a softish landing and that’s still very much our baseline. But, of course, there’s a lot of uncertainty just given how much macroeconomic data has surprised to the upside at the beginning of the year. So, it’s going to be a wait-and-watch," she said.