Jobs Report Will Be Key to Fed Plans; San Francisco Fed's Daly Shares Views on Economy, Rates; Bank of Japan Holds Rates Steady

Jobs Report Will Be Key to Fed Plans; San Francisco Fed's Daly Shares Views on Economy, Rates; Bank of Japan Holds Rates Steady By James Christie

Good day. Federal Reserve officials, and markets, will pick apart February's U.S. jobs report released today by the Labor Department. The report will help show whether January's hiring surge was an anomaly or the start of an economic acceleration. Either way, the report will help guide the Fed's thinking about the size of an interest-rate increase at its policy meeting later this month. With the Fed aggressively raising interest rates to tame inflation, many economists had expected job gains would cool or even turn into losses by now. Many employers are instead hiring at a rapid clip and wage gains remain well above their prepandemic pace, and that could challenge the Fed's inflation-fighting campaign. Meanwhile, San Francisco Fed President Mary Daly recently spoke with journalists, including Nick Timiraos of The Wall Street Journal, to discuss her outlook for inflation and her views about how much the Fed should raise interest rates. Elsewhere, the Bank of Japan kept its interest-rate targets unchanged on Friday at Gov. Haruhiko Kuroda's final meeting after 10 years on the job, but analysts expect policy to shift under his successor, Kazuo Ueda.

Now on to today's news and analysis.

Top News Jobs Report to Show U.S. Economy's Momentum in February

February's jobs report will offer clues about the U.S. economy's health at the start of the year.

Employers added a robust 517,000 jobs in January, and the unemployment rate fell to 3.4%, the lowest in more than 53 years. The job gains snapped months of slowing employment growth, surprised economists and anchored evidence of resilient economic growth despite high inflation and rising interest rates.

Transcript: San Francisco Fed's Daly Discusses the Economic Outlook

San Francisco Fed President Mary Daly discussed the outlook for inflation and her views about how much the Fed should raise interest rates this month, during a conference call with reporters. Here is a transcript .

Who Is Janice Eberly, Leading Candidate for a Top Fed Job?

Janice Eberly, the front-runner for the Federal Reserve's No. 2 job , would come to the position with experience in academia, policy-making and research into the central bank's past efforts to spur the economy's recovery from recession.

Bank of Japan Keeps Rates Unchanged at Kuroda's Final Meeting

The Bank of Japan maintained its cap on the 10-year Japanese government bond yield at 0.5% and kept short-term interest rates at minus 0.1%. Officials have said the bank still needs time to examine the effects of its December decision.

BOJ's Decade-Long Monetary Easing Was Successful, Kuroda Says

Bank of Japan Gov. Haruhiko Kuroda said Friday his decade-long monetary easing policy was successful in helping lift Japan out of deflation and improving the job market. "The bank's large-scale easing, together with the government's various measures, has been effective in boosting the economy and prices," Mr. Kuroda said at a news conference. (Dow Jones Newswires)

BOC Needs More Evidence to Assess If Policy Restrictive Enough

"If economic developments unfold as we projected and inflation comes down as quickly as we forecast in January, then we shouldn't need to raise rates further," Carolyn Rogers , the Bank of Canada's No. 2 official, said Thursday.

U.S. Economy U.S. Jobless Claims Jump But Remain Historically Low

Initial jobless claims, a proxy for layoffs, increased by 21,000 to a seasonally adjusted 211,000 last week, the Labor Department said Thursday. That was the biggest week-to-week increase in claims since early October.

Falling Survey-Response Rates Undermine Economic Data

Markets have been laser-focused on every scrap of economic data for clues on whether inflation is coming down or a recession is approaching, but falling response rates mean the data isn't capturing the true state of the economy.

Fear Over Social Security's Future Leads Some to Claim Benefits Early

Some Americans are claiming Social Security years before full retirement age out of fear their benefits will be cut once the program runs short on cash. They say they want to get as much in benefits as they can before 2034.

Biden Seeks Extension of Trump Tax Cuts for Most Households

President Biden largely wants to extend Trump-era tax cuts for households making under $400,000 a year beyond their scheduled expiration after 2025, the White House said in a budget statement Thursday.

What's in Biden's 2024 Budget Request Key Developments Around the World China's Xi Takes Third Term as President With Eye on U.S.

Xi Jinping will become China's longest serving head of state since the Communist victory in 1949 after the country's rubber-stamp legislature formally vests him with another five years as president.

U.S. Sanctions Drone Suppliers in China, 'Shadow Banking' Network

The Biden administration levied new sanctions against Chinese companies supplying Tehran's drone program and a network of firms the U.S. says are part of a clandestine financial system Tehran uses to facilitate trade.

U.K. Economy Swings Back to Growth on Premier League's Return

The U.K. economy returned to growth in January -with economic output 0.3% higher than in December when it fell 0.5%-boosted by a busy schedule of English Premier League soccer games after a pause for the World Cup.

France-U.K. Summit Rekindles 'Le Bromance'

French President Emmanuel Macron is rolling out the red carpet Friday for U.K. Prime Minister Rishi Sunak, as Europe's two biggest military powers look to end years of bad blood and present a united front against Russia.

EU to Compete With U.S. Clean-Tech Tax Breaks

The European Union is relaxing rules on government tax breaks and other benefits for clean-tech companies, part of an effort to prevent businesses being lured to the U.S. by new subsidies.

U.S., EU Try to Defuse Subsidies Dispute to Focus on Russia and China Financial Regulation Roundup Fed's Barr Calls for Stablecoin Regulation in Crypto Oversight

Michael Barr, the Fed's vice chair for supervision, said widespread adoption of stablecoins without regulation could be a threat to financial stability, and called for legislation addressing the cryptocurrencies.

SEC Is Focusing on Earnings Manipulation by Companies

The Securities and Exchange Commission is scrutinizing whether companies are manipulating financial results to meet Wall Street targets, as a profit-squeeze amps up pressure on executives to "make the numbers."

Biden's Pick to Run IRS Wins Senate Confirmation

Former acting Internal Revenue Service commissioner Danny Werfel won Senate confirmation Thursday with bipartisan support to run the IRS and manage the tax agency's $80 billion expansion.

FTC Seeks to Block Intercontinental Exchange's Black Knight Deal

The Federal Trade Commission voted to sue to block Intercontinental Exchange Inc., parent company of the New York Stock Exchange, from completing its $11.7 billion acquisition of mortgage software provider Black Knight Inc.

Forward Guidance Friday (all times ET)

8:30 a.m.: U.S. employment report for February

10 a.m.: ECB's Lagarde visits German Chancellor Scholz

Monday

10 a.m.: The Conference Board Employment Trends Index for U.S. for February

Research ECB Has More Work to Do to Reach Medium-Term Inflation Target

The European Central Bank's work is far from done to reach its medium-term inflation target, says Ulrike Kastens, European economist at DWS, adding she expects a 50 basis point interest-rate rise at the ECB's March 16 meeting. "Comments from numerous ECB members indicate that even this rate hike is not the end of the road," she says in a note, adding that February's 5.6% eurozone core inflation rate is likely to have alarmed members of the ECB Governing Council.

-Emese Bartha

Executives' Optimism About U.S. Economic Outlook Falls

Business executives are less optimistic about the outlook for the U.S. economy as well as their companies' profits and revenues than they were a year ago, according to a first-quarter survey released by the Association of International Certified Professional Accountants, a professional organization. Twenty-three percent of executives said they expected the economy to improve over the next 12 months, down from 36% a year earlier. Executives projected profits will rise by 0.6% on average over the next 12 months, down from 1.6% a year earlier, and respondents also said they expected revenues to grow by 2.6%, compared with 4.5% a year earlier. AICPA surveyed 438 executives.

-Mark Maurer

Commentary Here's Why the Economy Seems Weird

The economy has flummoxed experts in recent years, with almost no one expecting inflation to rise so much or higher interest rates to show so little effect, Greg Ip writes in a look at how this cycle is different from the recent past .

Markets Are Telling Investors Two Things at Once

There is a big puzzle in today's market: Treasurys appear to be anticipating a recession, while stocks and corporate bonds aren't. There are several decent answers why we have such different signals, James Mackintosh writes.

How Russia Supplies Its War Machine

Russia's economy hasn't been ground to a halt by sanctions as the ability of the U.S. and its allies to dictate global trade flows in high-technology items has, so far, proven much less effective than many had assumed, Nathaniel Taplin writes.

(MORE TO FOLLOW) Dow Jones Newswires

03-10-23 0715ET