© © Reuters
By Noreen Burke
GossipMantri.com – Investors will look at Friday’s US jobs report for August for an overview of how the labor market recovery from the pandemic has evolved. Markets will also keep an eye out for appearances by senior Federal Reserve officials after President Jerome Powell announced a sweeping political rewrite last week that places more emphasis on strengthening the labor market than controlling labor. ‘inflation. The S&P 500 is on track to post its strongest August in 34 years, while the Dow Jones will have new names in the index starting Monday. Eurozone economic reports will shed more light on the sustainability of the Union’s recovery, while PMI data from China will watch for signs of the recovery progressing in the world‘s second largest economy. Here’s what you need to know to start your week.
- August non-farm payrolls
Friday’s non-farm payrolls will be eagerly awaited amid fears that the recovery in the labor market may stall, with initial jobless claims hovering around $ 1million per week.
Consensus predicts that the US economy will have created jobs in August, down slightly from 1.76 million in July, while the unemployment rate is expected to drop to 10.2%.
But some analysts are speculating that the jobs report could be weaker than expected after recent data on poor consumer confidence highlighted anxiety over the increase in Covid cases and concerns about the outlook for employment.
Thursday’s report will provide a more up-to-date snapshot of the labor market after recent reports indicated that the next stage of the labor market recovery will be much slower.
- Fed speakers
Investors will have the chance to hear from three senior Fed officials as they digest last week’s announcement of the central bank’s new strategy that would keep interest rates near zero even if inflation exceeds its objective to support the recovery of the economy and work. market.
Vice President Richard Clarida will deliver a speech on the Fed’s new monetary policy framework on Monday. Governor Lael Brainard is also due to speak on the new policy framework a day later, while New York Fed Chairman John Williams is due to discuss the economy and the pandemic on Wednesday.
The Fed will enter its blackout period ahead of its next policy meeting, which will be held September 15-16 at midnight Friday.
- Disconnection from the stock market
On Friday, it hit its sixth closing record since the confirmation of a bull market on August 18 propelled by Amazon (NASDAQ :), Microsoft (NASDAQ 🙂 and Apple (NASDAQ 🙂 in a rally that highlighted the divide between soaring stocks. market and a struggling US economy.
With the ebb in fiscal stimulus, signs are growing that the economic recovery is slowing. Economists still expect a strong rebound in growth this quarter, but are lowering estimates for the fourth quarter.
The S&P 500 is on track to post its highest August in 34 years and stocks are expected to enter September on solid footing after the Fed pledged to keep interest rates close to zero even as the inflation is hot.
Meanwhile, new names will appear on Monday after the index adjusts with Salesforce (NYSE :), Honeywell (NYSE 🙂 and Amgen (NASDAQ 🙂 replacing Pfizer (NYSE :), ExxonMobil (NYSE 🙂 and Raytheon (NYSE :).
- Recovery of the euro zone
Eurozone figures on Tuesday are expected to show price growth remained lukewarm in August, while same-day figures should point to a slight uptick.
Friday’s data should show that the pace of the recovery slowed in July.
Investors will also have the chance to hear from several policymakers from the European Central Bank, with Vice President Luis de Guindos, Chief Economist Philip Lane and Governing Council members Jens Weidmann and Klaas Knot all making appearances. during the week.
- Chinese PMI
China’s August PMI reports on Monday and Tuesday are expected to provide a health check of the world‘s second-largest economy.
The official manufacturing PMI on Monday is expected to rebound in August from the July four-month high of 51.1 and Tuesday’s Caixin manufacturing PMI is expected to decline to 52.8 in July.
Activity in the country’s vast industrial sector is steadily returning to levels seen before the pandemic crippled large parts of the economy earlier this year.
Suppressed demand, stimulus-driven infrastructure and strong exports were the main factors behind the rebound, but private consumption lags as consumers remain cautious about spending.
–Reuters contributed to this report