The United States’ economic future is primed for historic transformations. Market participants are looking ahead to the next non-farm payroll report and GDP growth report. Save the date! Looking ahead, the November Jobs Report comes out on December 5th. In the meantime, prepare for the September Jobs Report, expected out early next week. These updates would be a welcome relief alongside recent data that paints a mixed picture of employment growth and overall economic stability.
In the weeks leading up to October 25th, ADP’s weekly private sector payroll estimates showed another disturbing picture. US employment growth sank deep into the negative, -11,000 jobs per week. This recent downturn has raised alarms over the labor market’s newfound durability. These questions come to mind particularly in light of the US government shutdown that just ended. Analysts had wanted to see more confidence in the market after this reopening. That has hardly done much to rekindle investors’ risk appetite.
Everything is off to a late start, particularly data collection for some new and improved November reports. Experts caution even small setbacks are possible due to the unexpected fallout of the recent short-lived shutdown. While markets continue to deal with uncertainty, much of the focus is shifting to other critical economic signs. As reflected by the PMIs, scope for more positive growth outlook across developed markets has continued through much of this year. Though challenges remain, this trend is a current spark of hope.
Internationally, economic data is showing scars signs as well. In the UK, growth in employment reversed sharply in October, with 32,000 jobs reported lost. This comes on the heels of a disappointing GDP growth estimate for the UK, which showed a 0.1% contraction for September. These trends not only impact global economic prosperity, they highlight how today’s national economies are deeply intertwined with each other.
Looking forward, a number of big releases are expected in the next ~7 days. These include the September Job Openings and Labor Turnover Survey (JOLTs), the Personal Consumption Expenditures (PCE) index, and third-quarter GDP figures. We’ll be paying particularly close attention to the flash November PMIs from the euro area, the UK, and the US. These reports would provide meaningful suggestions on actions we can take to improve our current anemic economic times.
The German ZEW index has only worsened the jitters, with the first results falling well short of expectations as the expectations component fell sharply. This data is part of a larger story of concerns over European economic growth and the risk of economic spillover to the US economy.
Additionally, the minutes of the Federal Open Market Committee’s (FOMC) October meeting are sure to pull even closer scrutiny. Just yesterday, a number of Federal Reserve speakers publicly expressed a wide spectrum of opinions. This has led to widespread conjecture about what the future will hold for monetary policy. Analysts will be tuning in, eager to spot the first signals that might suggest changes in policy as economic conditions continue to evolve.
So the reopening of government operations acts as a major stimulus to the economy. We still have a huge backlog of crucial US macroeconomic data that needs to be released. The future of any October releases is in doubt because the government shutdown disrupted the data collection period for this highly anticipated release.