3 Numbers Driving Markets This Week

Today is the final day of the first quarter, which means earnings season is just around the corner. But before we get there, the market will have its sights set on progress in the labor market, which will drive the market this week. Both the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) are near all-time highs, and a strong jobs report will keep the momentum going, while a weak report could make the markets rethink their bullishness.

The first number I'll be watching this week is the ADP employment change on Wednesday. This is a private reading of employment, similar to nonfarm payrolls, but it doesn't match the government reading exactly. Economists are expecting 200,000 jobs to be added, and this should be a preview of the rest of the week.

On Friday, economists expect nonfarm payrolls to increase by 185,000, highlighted by a rise of 210,000 in private payrolls. That's below the 236,000 jobs created in February, but it's still a strong reading, considering the challenges facing the U.S. in the first half of this year. For markets, this is a very important reading, because it will drive consumer spending, which accounts for about 70% of our economy. 

At the same time nonfarm payrolls are announced, the government will give us the unemployment rate. Unemployment currently stands at 7.7%, but economists expect a slight increase to 7.8% as more people enter the market. The unemployment rate is probably the most volatile of these three numbers, but it's psychologically important, because it's the best indicator of the ease of getting a job. 

Progress in the labor market has been slow but steady, and we're still trying to get an idea of the impact that higher taxes and lower government spending will have on the economy. These three numbers will give an import progress report.

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