The keenly awaited monthly snapshot of U.S. employment conditions is likely to reinforce the notion of continued and gradual healing. It will show that:
• The economy continues to generate jobs at a sound pace.
• Long-term unemployment is still edging lower.
• Discouraged workers are being attracted back into the labor force at a slow pace.
• Perhaps wages are starting to increase.
All of this would speak to a U.S. economy that continues to expand and outperform most other countries. But keep in mind that growth also falls short of the escape velocity needed to make a material difference in the population’s well-being, and that the economy lacks the strength to counter potential domestic and external headwinds to growth.
In itself, these insights would do little to change market perceptions and pricing. But Friday’s numbers could be important if they influence perceptions of the Fed’s policy outlook.