Another big jobs report is coming up — and it probably won't look good either.

The upcoming, lesser-known QCEW jobs report is anticipated to reveal a significant U.S. hiring slowdown that may have commenced last year. This potential downward revision to job creation figures could signal a weaker labor market than currently understood, impacting economic outlooks and monetary policy expectations.

Analysis

The market is bracing for the release of the lesser-known Quarterly Census of Employment and Wages (QCEW) report, which is anticipated to reveal a significant and previously unacknowledged hiring slowdown in the U.S. economy. According to the preview, there is a pessimistic outlook for the data covering the period from April 2024 to March 2025, with expectations that it will show the labor market slowdown began last year. A substantial downward revision in this report would imply that the U.S. labor market is fundamentally weaker than more timely, preliminary reports have suggested, challenging the prevailing narrative of economic resilience and carrying a moderately negative sentiment with potential for notable market impact.

Key Decisions for Investors

• Investors should exercise caution ahead of the QCEW report release on Tuesday, as a significant downward revision to job numbers could increase market volatility and negatively impact cyclical assets.
• Monitor the magnitude of any revisions, as a confirmation of a weaker labor market could alter the Federal Reserve's policy trajectory and lead to a repricing of interest rate expectations.
• It may be prudent to review portfolio positioning and consider hedging strategies if heavily exposed to sectors dependent on strong economic growth and robust employment.