Axios reports, from University of Michigan data analyzed by Bank of America: “The share of consumers who say they expect unemployment to rise over the next year surged to 66% in March — by far the highest level going back a decade.”

• Axios added: “The unemployment rate is pretty low at the moment. But under the hood, Americans sure are nervous about the job market. Add rising job anxiety to the growing list of soft indicators that may be signaling trouble ahead.”
• Bank of America notes: "...in our view, while the labor market remains solid, it’s possible that consumers’ negative expectations may weigh on their spending decisions, especially when it comes to lower-income households and their more discretionary choices."
• The report is another potential warning sign for the Trump administration, which has seen a series of surveys showing that voters are unconvinced by Trump's handling of the economy.
• A new poll from NBC News this week shows, "54% of voters disapprove of Trump’s handling of the economy. Numbers like this will likely get to Trump. It’s not his brand to be perceived as weak."

Figure 1: Share of Consumers who say they Expect more Unemployment in the Next 12 Months, April 2014 – March 2025

Source: Axios, University of Michigan

US President Donald Trump has delivered a wide-ranging press availability following remarks at the Oval Office where he announced Boeing has been awarded the contract for developing sixth-generation US 'F-47' fighter planes. LIVESTREAM 

• When asked if there is anything China can do to avoid tariffs on April 2, Trump says: "Well we can talk" but immediately follows with his regular justification for his tariff agenda: "Do believe me April 2nd is going to be 'liberation day' for America. We've been ripped off by every country in the world..."
• Trump adds: "I'll be speaking to [Chinese] President Xi [Jinping]. I have a great relationship with him... But we have a trillion dollar deficit, because of Biden, with China... And we have a problem with [Fentanyl]."
• When asked if any tariff exceptions for other countries are under consideration, Trump says: "Well, people are coming to me and talking about tariffs and a lot of people are asking me if they can have exceptions and once you do that for one you have to do that for all..."
• Trump adds: "I did something interestingly two weeks ago: I gave the American car companies a break because it would have been unfair if I didn't." Trump stresses that, contrary to reporting, he "didn't change his mind", he "helped some of the American companies."  
• Trump says: "I don't change [my mind]... the word flexibility is an important word. Sometime's there's flexibility so there'll be flexibility but basically, it's reciprocal..."

US President Donald Trump is shortly due to deliver remarks in the Oval Office alongside Defence Secretary Pete Hegseth LIVESTREAM. Jennifer Jacobs at CBS reports that Trump and Hegseth will "announce contract award to produce sixth-generation fighter jets".

• The remarks come as Hegseth pledges to dramatically overhaul the Pentagon budget and end “spending identified by the Department of Government Efficiency that does not match the priorities of [Trump] or the Defense Department”.
• Punchbowl noted yesterday: “Top Republicans are sounding the alarm over the Trump administration’s reported plans to relinquish U.S. leadership of NATO military operations in Europe and to scrap a planned buildup of American forces in Japan, among other dramatic changes to the combatant command structure.”
• The Trump Administration is under additional scrutiny after the New York Times and Wall Street Journal reported that the Pentagon is expected to brief Elon Musk on top-secret plans for China – an unprecedented step for a civilian government advisor with business ties in China. Recognising that public opinion of Elon Musk is a vulnerability for Trump, the White House has aggressively headed off the reporting.
• Musk told reporters after today's meeting at the Pentagon: "It's always a great meeting. I've been here before, you know,"

• Next Wednesday will see Chancellor Reeves deliver her Spring Statement, that will include the OBR's (independent fiscal forecaster) forecasts.
• The statement is due to begin at 12:30GMT followed by the release of the DMO's financing needs (including the gilt remit) around 13:30GMT. Note that Reeves has committed to no tax increases, but spending cuts are expected to balance the books with disappointing growth and higher borrowing costs likely having eroded Reeves' fiscal headroom. Having said that, we would not rule out further income tax threshold rises into later in the parliament (which could be argued by Reeves to not be a tax increase).
• We will put out our full Spring Statement preview next week, along with full analysis of sellside remit expectations. Based on our preliminary findings expectations for the gilt remit for 2025/26 range from GBP292bln to GBP315bln (median GBP302bln). There is a greater skew towards shorts than in previous years (median 36.2% vs 34.3% this year), albeit with estimates ranging from 33.9% to 38.5% for this bucket. The proportion of longs sees the smallest reduction versus the current fiscal year.
• There is also a large range of views surrounding the size of the unallocated bucket (ranging from GBP10.5bln to GBP28.0bln) as well as whether there will be an increase in net T-bill stock (estimates range from flat to a GBP10bln increase with the median at GBP5bln).
• The one notable thing that we have not seen mentioned much in sellside previews is the impact of the already announced switch from aid spending to defence spending. Aid spending is current spending while at least some of the additional defence spending is likely to be capital spending. Reeves' fiscal headroom is based on the current budget balance (and hence the switch from aid to defence spending helps here). It may be that this has not been fully accounted for in expectations, which may mean that cuts need to be less than expected. However, we have long argued (since the last Budget) that further cuts / tax rises would be needed down the line - and that was before rates and inflation remained as sticky as they appear to be now.