March 2025 NFP Preview
Difficult to see private sector outweighing DOGE-effect for months to come
Summary: Idiosyncrasies affecting different industry groups are expected to introduce noise into March’s payroll data, much like in the first two months of the year. That said, the effects of DOGE and navigating the high uncertainty of Trump 2.0 has likely resulted in less job growth, as well as businesses most likely taking a “wait and see” approach before making major decisions on capex and hiring.
Market implication: The issue with this Friday’s NFP reaction is that the number (really the full set - because U3 rate matters more in our view for rates and Fed policy ahead) has to meaningfully break from consensus to move markets. And with Powell speaking post the number, the reaction may be muted unless it’s a big outlier. If it’s strong we expect investors to buy the dip in rates. Net, we expect nothing major but an outlier can amplify the movement into weekend.
