Why the jobs report will be important, even if there is no one to exchange it

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If an employment report comes in with no one around to exchange it, does it sound? That’s the situation facing the Department of Labor’s March non-farm payroll release, which comes as the US and European stock markets are closed in compliance with Good Friday.

To be fair, there are a few markets that will be open. The bond market will be open until noon, and the ES00, + 0.26% NQ00, + 0.33% futures market will trade until 9:15 am ET. And the forex market is never closed.

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But even if there is a limited immediate reaction to the employment figures, they will be important for the markets in the future. Economists polled by Dow Jones Newswires and The Wall Street Journal expect 675,000 jobs were created in March, which would be the best reading since October. Even a profit of a million, not possible, would leave the United States economy some 8 million jobs below pre-pandemic levels. David Rosenberg, chief economist and strategist at Rosenberg Research, notes that if the leisure and hospitality industry, airlines, and state and local governments hired the 5 million who have been laid off, the economy would still have few jobs. “What all this says is that in this period of history, companies learned that they could produce the same or more with less labor. So even with the worst year for real GDP since 1946, [2020] it was the best year for productivity in a decade, ”he says. That big gap is why the Federal Reserve is nowhere near raising interest rates, even as inflation readings are likely to rise in the coming months. But what the central bank could do this year is lower the bond purchase rate, a step that will have huge implications for financial markets, given the focus on this year’s rapid rise in the 10-year Treasury yield TMUBMUSD10Y, 1,676%. Federal Reserve Chairman Jerome Powell said asset purchases will continue at current rates until “we see further substantial progress, and that is actual progress, not anticipated progress.” “The new Fed framework may be focused on inflation, but the decision to lower it will be driven solely by the labor market,” says Aneta Markowska, chief economist at Jefferies. If the unemployment rate, 6.2% in February, can drop below 5% by the middle of the year, that should be enough to start discussions on the reduction, he says. Need to Know starts early and updates until the opening bell, but sign up here to receive it once in your email box. The emailed version will ship at approximately 7:30 AM ET. Do you want more for the next day? Sign up for The Barron’s Daily, a morning investor briefing, featuring exclusive commentary from the Barron’s and MarketWatch writers