Jobs preview — What you need to know in markets on Friday

Myles Udland
Markets Reporter

In a busy week for markets and the economy, Friday will bring us the week’s biggest economic data point — the April jobs report.

Economists expect nonfarm payrolls grew by 190,000 in April while the unemployment rate is expected to rise slightly to 4.6%. In March, the unemployment rate hit a new post-crisis low of 4.5%.

Via Bloomberg, here’s what Wall Street is looking for on Friday:

  • Nonfarm payrolls: +190,000
  • Unemployment rate: 4.6%
  • Average hourly earnings, month-on-month: +0.3%
  • Average hourly earnings, year-on-year: +2.7%
  • Average weekly hours worked: 34.4

Elsewhere on Friday, after the market close we are expected to get quarterly earnings from Berkshire Hathaway (BRK-B, BRK-A), one day before the company’s latest annual meeting which will be streamed live on Yahoo Finance all day on Saturday.

On Thursday, markets finished the day little-changed while the big news of the day came out of Washington, D.C. House Republicans got their first major legislative win, passing a modified version of the American Healthcare Act, which will now go to the Senate.

Reports indicate the Senate is likely to write their own version of the bill, which passed in the house by just four votes.

The biggest market move on Thursday was oil, with WTI crude oil falling nearly 5% to around $45.50 a barrel, its lowest price in five months.

Jobs preview

After the economy added just 98,000 jobs in March, some began questioning whether the labor market was indicating a broad economic slowdown. And following last Friday’s poor GDP report, a case could be built that things are beginning to slow.

April, however, should point towards the strength in the U.S economy remaining.

Economists at Goldman Sachs, who expect 200,000 jobs were added to the economy in April, said in a note ahead of the report that, ” Labor market fundamentals remained encouraging on the whole, as April exhibited a further decline in initial jobless claims, improvement in regional service sector employment surveys, and an elevated labor market differential reported by the Conference Board.”

The retail sector, which saw sharp job losses to start the year, is also a focal point, with Goldman writing that, “On the negative side, we believe the trend in retail employment growth is now slowing, reflecting the weaker brick­-and-­mortar sales trends and a continued shift towards less labor-­intensive e-­commerce firms.”

Joe LaVorgna, chief U.S. economist at Deutsche Bank, expects the economy added 200,000 jobs in April, and says that initial claims and tax withholdings both point to a strong report.

“Employee tax withholding receipts are growing at a very healthy rate, indicating a pick up in income growth,” LaVorgna writes. “In point of fact, their smoothed annual run rate has been edging higher over the past several months. While some of this may be the result of longer hours (more on this below) and higher wage growth; historically, acceleration in tax receipts is more common with a step-up in job gains.”

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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