BofA update shows where active managers are putting money
Investing.com - The U.S. economy is tipped to have added a "robust" 185,000 jobs in March, as improved weather helps make up for federal government cuts by a group helmed by Elon Musk, according to analysts at BofA.
In a note to clients on Tuesday, the analysts led by Shruti Mishra said that they do not anticipate the job reductions overseen by the Tesla (NASDAQ:TSLA) CEO’s "Department of Government Efficiency" -- or DOGE -- would be a "sizeable drag" on the overall labor market.
"After a brief head-fake in late Februrary, initial jobless claims returned to muted levels in the survey week of the jobs report [...] [t]his points to a solid labor market in March, with minimal DOGE impact thus far," Mishra wrote.
"Although jobless claims among federal employees are elevated, they are down from a couple of weeks ago. And the numbers are too small to move the needle on the broader labor market."
Consensus estimates currently see the all-important nonfarm payrolls figure for last month at 139,000, compared with 151,000 in February and 125,000 in January.
Mishra flagged that the January and February payroll readings were softer than anticipated, and substantially below three- and six-month averages of around 200,000, due in part to the impact of a spell in cold weather across the U.S.
The leisure and hospitality sectors, which are typically impacted by extreme weather, were down by an average of 15,000 jobs in the two months, sinking from 35,000 in average monthly gains in the second half of last year.
However, Mishra said that "some payback on that front" is expected to show up in March’s jobs report.
Still, downside risks to the figure remain, particularly as "unprecedented policy uncertainty" threatens to weigh on hiring, Mishra added.
Recent data have pointed to a fading in U.S. business and consumer confidence, with doubts swirling around how companies will approach future spending and hiring due to President Donald Trump’s tariff plans. Trump is due to unveil a slew of new levies on April 2, prior to the release of the nonfarm payrolls on Friday.