Jobs Data Will Drive Trading in Coming Week

NEW YORK (TheStreet) -- With the uncertainty over the government's March employment data stripped away and little else on investors' plates, the reaction from traders to the report will largely drive the stock market in the coming week.

The March nonfarm payrolls report showed an increase of 162,000 jobs, which came in below the 200,000 consensus of a wide range of estimates. The unemployment rate held steady at 9.7%.

Stock market participants were unable to trade on the data, though, as the release came on the Good Friday holiday. The bond market was open Friday morning, however, and Treasury prices declined on the employment report as it pointed to economic strength that eventually could cause the Federal Reserve to raise interest rates.

> > Bull or Bear? Vote in Our Poll

With only a smattering of data on the economic docket over the next five trading sessions and the first-quarter earnings reporting season still a week away, equity traders have little else to react to when they return on Monday.

Some economists argued that the report was actually a positive one, due to the relatively low number of jobs created by the government census. Only 48,000 temporary workers were hired for census-taking, while private-sector employment rose by 123,000 jobs, the most in nearly three years.

While the average work week increased slightly to 34 hours in March, the report showed that hourly earnings fell 0.1%, compared with estimates for a 0.2% rise. Some may speak of the "Goldilocks" quality of the March jobs data, but others are quick to remind that one report doesn't indicate a trend yet.

"Regardless, this is still one data point, and the market is not comfortable with the health of the economy in terms of longer-term prospects of job growth," says Justin Golden, a strategist at Macro Risk Advisors. "While it has perked up, we still have nearly 10% unemployment, and those figures still cause great concern down the road."

Even though employment growth is needed over the long haul to sustain any economic recovery, some market watchers say that the idea of a stronger-than-expected jobs report could push bond yields (which move in the opposite direction of bond prices) even higher in the coming week, which could put pressure on the equity market.