US average weekly hours worked in March came in at 34.2. This was below the forecast of 34.3.
The result shows a shortfall of 0.1 hours versus expectations. The figures relate to the United States and refer to March.
Labor Market Signals Weaker Momentum
This miss in average weekly hours, though small, is a key sign that the labor market is losing steam. It suggests employers are trimming hours before considering layoffs, which could weigh on future wage growth. We see this as a forward-looking indicator that gives the Federal Reserve more room to consider easing monetary policy later this year.
This data point reinforces a broader trend we’ve been tracking. It comes on the heels of the latest March CPI report, which showed core inflation moderating to 2.8%, and a Non-Farm Payrolls number that also missed expectations, coming in at 175,000 new jobs. Taken together, these figures paint a picture of an economy that is cooling off as intended.
For traders, this strengthens the case for positioning for lower interest rates. We believe this is a good time to buy call options on interest-rate-sensitive indexes like the Nasdaq 100 for the coming months. The logic is that the prospect of lower rates will provide a significant tailwind for growth stocks.
Looking back from our perspective in 2025, this setup is reminiscent of the market in late 2023. Back then, early signs of labor market weakness were the initial trigger for the Federal Reserve to signal a policy pivot, leading to a substantial rally in equities. We are watching for a similar dynamic to unfold in the second quarter of 2026.
Implications For Rates Dollar And Bonds
This view also makes short positions on the US dollar attractive, likely using futures contracts. As rate cut expectations for the Fed increase, the dollar’s yield advantage over other currencies will diminish. At the same time, we see an opportunity in long positions in Treasury bond futures, as their prices will rise if rates fall.
