Jobs Report to Give Investors New Inflation CluesJobsReporttoGiveInvestorsNewInflationClues

When the US Bureau of Labor Statistics publishes its monthly jobs report on Friday, market participants will be looking for signs that a still-hot labor market is cooling—and, in turn, relieving some of the upward pressure on inflation. Economists estimate that employment grew by 238,000 jobs in March, which would reflect a drop from 311,000 in the previous month. Wage growth is also forecast to decline, touching 4.3% year-over-year compared with 4.6% in February. On the day of the jobs report, markets will be closed for Good Friday. A separate report this week indicated that labor demand was softening earlier this year. The number of unfilled positions in the US fell to 9.9 million at the end of February from 10.6 million the month before, marking the first time that job openings crossed below 10 million since May 2021. The labor market remains tight nonetheless, as job openings continue to outnumber the unemployed. In February, there were 5.9 million Americans who were out of work and seeking a job.

The jobs report will add another layer to the outlook for interest rates and inflation, leading into next week’s update on consumer and wholesale prices for March. A surprise cut to future oil production, which caused a sharp jump in crude prices to start the week, also brought a new wrinkle to inflation’s path ahead. Higher prices at the pump could further complicate policy decisions inside global central banks including the Federal Reserve, which is already balancing inflation against potential risks in the banking sector. As the market outlook continues to evolve, PGIM’s Alts Forum explored opportunities for investors to diversify their portfolios through allocations in liquid alternatives.