Making Sense: In Brief

The week ahead for markets and the economy

Phil: Last week, markets priced more news out of the banking sector, along with slightly better-than-expected inflation data in last Friday's personal spending report.

Looking to the week ahead, investors will be focused on Friday's March employment report. The labor market has remained resilient in the face of tighter monetary policy. After gaining 311,000 jobs in February, the consensus expects roughly 240,000 net-new jobs in March. The unemployment rate is expected to hold steady at 3.6 percent, while the pace of year-over-year wage gains is expected to slow to 4.3 percent from 4.6 percent in February. Keep an eye on labor force participation. It has improved in recent months, particularly in the prime age category—those between ages 25 and 54—which is back to its pre-pandemic level. Continued moderation in the pace of wage inflation combined with improvement in participation would be welcomed news to the Federal Reserve in its fight against inflation.

Earlier in the week, ISM manufacturing was released on Monday, while ISM services comes out on Wednesday. These indices give good indication of the pace of underlying activity in both the industrial and service side of the economy. Since late last year, the manufacturing index has indicated slowing activity, while services activity has remained robust as spending has rotated away from goods and toward services. This trend is expected to persist in this week's release.

Given the events in recent weeks, markets will likely remain focused on the global financial sector, especially with bank earnings season just around the corner.

So items to watch this week. One, employment report. Two, ISM Manufacturing and Services. Three, financial sector.

Making Sense In Brief Outro Slide

Brent Ciliano

CFA | SVP, Chief Investment Officer

Capital Management Group | First Citizens Bank

8510 Colonnade Center Drive | Raleigh, NC 27615

brent.ciliano@firstcitizens.com | 919-716-2650

Phillip Neuhart SVP, Director of Market and Economic Research

Capital Management Group | First Citizens Bank

8510 Colonnade Center Drive | Raleigh, NC 27615

phillip.neuhart@firstcitizens.com | 919-716-2403

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