The coming week offers a packed US data calendar as well as the US Treasury's quarterly refunding announcement and the FOMC meeting.
We should get a sense about whether the economy is faring a bit better as the fourth quarter gets off to a start, and if the outlook for fiscal and monetary policy is at all improved.
The October data on the employment situation is also due on Friday and will clearly be the focus of the week. The current gloomy perceptions of conditions in the labor market could lighten a bit if there is evidence that payrolls have not lost momentum going into the fourth quarter. The monthly average for the last two quarters is just under 100,000 in both, and the median market expectation for the change in October payrolls is about that. There is little sentiment that the unemployment rate is going to decline from the 9.1% that has held in the prior three months, but at least it should be no worse.
The ADP National Employment Report on Wednesday will probably be the most closely watched of the labor market indicators going into the government report. The data has had some big misses in the last few months, but still remains the most likely indicator to give an accurate signal about the change in private payrolls which is where we can expect job growth to take place. The government sector has been consistently losing jobs at the state and local levels.
The Challenger report on layoff intentions on Wednesday should confirm that job cuts are mainly restricted to a few sectors -- notably finance and government -- while hiring intentions are on the rise for some seasonal work in retail and transportation.
Initial claims for jobless benefits in the week ended October 29 on Thursday will probably remain about on trend. New filings appear to have settled in near the 400,000 mark.
The ISM Manufacturing Index on Tuesday and the ISM Non-Manufacturing Index on Thursday will reflect two differing trends, although both should remain consistent with expansion. While the factory sector is showing some rebound in activity after the uncertainties in August and September, the service sector is struggling as consumer confidence plunged.
The Dallas Fed's Texas Manufacturing Outlook is set for Monday, while its Service Sector Outlook is due on Tuesday. Both of these will probably fall in line with the data already available from the New York and Richmond Feds.
Manufacturing activity remained little changed in October from September. Service sector data from the Richmond Fed was weaker. The October index from the Chicago Purchasing Managers on Monday will also be a focus with the other manufacturing and services data.
New orders for factory goods on Thursday should reinforce that orders are firming outside of the transportation sector.
New orders for durables were reported at down 0.8%, however,,...Read more
