CNBC Daily Open: Everyone is holding their breath for Friday’s jobs report


Vadnais Heights, Minnesota, The Urgency Room medical facility posts a hiring sign on a local billboard looking for experienced staff.

Michael Siluk | Universal Image Group | Getty Images

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Markets – and Powell – are holding their breath for Friday’s jobs report.

What you need to know today

  • Two data points released yesterday showed that the labor market is still tight. There were 10.824 million job openings in January, 410,000 fewer than in December, but still higher than expected. Private payrolls rose 242,000 month over month in February, payroll firm ADP reported.
  • PRO Yesterday was International Women’s Day. To commemorate the occasion, CNBC highlighted this ETF, which invests only in companies led by women – and is expected to rise 20% this year and beat the S&P 500.

it comes down to

Yesterday, Fed Chairman Jerome Powell called the job market “extremely tight.” It was foresight.

Two jobs reports released yesterday show that the labor market remains stubbornly robust. First, the U.S. Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS. Although it indicated that the number of vacancies fell in December, the absolute number is still uncomfortably high (at least for economists worried about inflation): there were 1.9 vacancies per available worker. Private payrolls did indeed rise in February, led by an 83,000 increase in the leisure and hospitality sector, according to ADP. The combination of a tight labor market and – perhaps more importantly – the concentration of job additions in the services sector means that risks of inflation in the services sector remain.

However, there is good news buried in the reports. (Again, a caveat first: It’s only good news in terms of controlling inflation; it may not be music to employees’ ears.) The JOLTS report showed that employee layoffs — a sign of confidence in mobility – dropped to the lowest level since May 2021. Layoffs surged to 241,000, up 16% month-on-month. Wage growth also slowed in February. Employees who keep their jobs saw an annual increase of 7.2%, down 0.1 percentage points from January; job changers saw a more drastic drop of 0.6 percentage point.

Markets chewed on that hodgepodge of data and made little movement. The Dow was down 0.18%, while the S&P 500 was up 0.14% and the Nasdaq Composite was up 0.4%. They also paused yesterday’s sell-off after hearing Powell’s new comments on Wednesday that the Fed hasn’t decided what to do at its March meeting. “We will be guided by the incoming data,” Powell said, suggesting that he, like investors, will hold his breath until Friday when the more comprehensive non-farm payrolls report is released.

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