Week Ahead: Economic Indicators (US)
For the October 28th week, here is a list of the major economic indicators released during the US Session.
Keep in mind, that the EU & UK experience daylight saving time changes on Sunday 27th, so if you are based in this region, beware of US releases occurring at different times than usual in your area.
Tuesday 29th October
10:00 ET
US JOLTS Job Openings for September
US Job Openings and Labor Turnover Survey is a monthly report released by the Bureau of Labor Statistics (BLS) that provides data on the number of job openings, hires, quits, layoffs, and other separations in the United States.
It measures the demand for labor, offering insights into the labor market’s strength.
A high number of job openings indicates a strong demand for workers and a healthy job market, while a decline may suggest weakening demand.
What to Expect
A higher-than-expected job opening number, indicating good demand for labor, would likely cause strength across US assets (stocks, dollar, and bond yields), as it would reduce fears of a broader economic slowdown.
A lower-than-expected job openings number would likely do the opposite, as it instills further fears of a broader economic slowdown.
US CB Consumer Confidence for October
The US CB Consumer Confidence Index is a monthly economic indicator published by The Conference Board.
It measures the confidence of American consumers in the economy based on their perceptions of current economic conditions and their expectations for the future.
This index is derived from a survey that assesses consumers’ attitudes about business conditions, employment, and income.
Higher confidence levels indicate optimism about the economy, which can lead to increased consumer spending and economic growth, while lower levels suggest pessimism and potential reductions in spending.
What to Expect
At this stage in the economic cycle, It is not common for the consumer confidence report to produce a market reaction without a large deviation from the forecast.
If consumer confidence is higher than expected, that would likely lead to strength across US assets (the dollar, bond yields, and stocks), as it will help alleviate fears of a recession, as it shows resilience in the consumer.
If it comes in lower than expected, this could create warning signs for a recession, which would be likely to cause weakness across US assets.
If higher, we could see some weakness in US stocks and strength in the dollar, and the opposite could be true if it comes in lower.
Wednesday 30th October
08:15 ET
US ADP Employment Change for October
The US ADP Employment Change is a monthly report released by the ADP Research Institute that estimates the change in non-farm private sector employment in the United States.
It is based on payroll data from approximately 460,000 US businesses.
The report provides an early snapshot of the labor market ahead of the more comprehensive official employment report by the Bureau of Labor Statistics (BLS).
An increase in ADP employment change suggests job growth and economic expansion, while a decrease may indicate weakening labor market conditions.
What to Expect
With employment in focus at the moment, as the Fed focuses on the employment side of its mandate, higher-than-expected ADP numbers, indicating a stronger jobs market, would likely reduce fears of a larger slowdown, increase chances for a soft landing, and cause potential strength in US stocks and the dollar.
The opposite would be true if it came in lower than expected, as this would increase fears of a larger slowdown, reduce chances for a soft landing, and cause potential weakness in US stocks and the dollar.
08:30 ET
US GDP Q3 Advanced
US Gross Domestic Product is a quarterly economic indicator that measures the total value of goods and services produced within the United States over a specific period.
It reflects the overall economic activity and growth of the country.
GDP is used to assess the health of the economy, with increases indicating expansion and decreases suggesting contraction.
It is composed of four main components: consumption, investment, government spending, and net exports.
There are also inflation components in this report, the quarterly Core PCE, and the GDP Price Index.
What to Expect
Markets will likely monitor the US GDP numbers as they relate to broader economic conditions, meaning that if GDP comes in higher than expected, this would reduce the chances of recession, which would be likely to cause strength in US stocks, the dollar, and government bond yields.
If it comes in weaker than expected, this could cause weakness in US stocks, the dollar, and government bond yields, as recessionary fears increase.
In terms of the inflation component, the markets are likely to respond differently to this, as they relate these numbers to their effects on US monetary policy.
This means if the GDP Price index or quarterly PCE numbers come out higher than expected, this would likely cause weakness in US stocks and strength in the dollar and government bond yields, as it would be likely to reduce the chance of larger interest rate cuts this year.
If it came in lower than expected, I would anticipate the opposite, with US stocks strengthening and the dollar and government bond yields weakening, as it would increase/solidify bets on Fed rate cuts this year.
10:30 ET
US Weekly EIA Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, released by the Energy Information Administration every Wednesday, provides data on the amount of crude oil stored in the United States.
This report helps to assess the balance between supply and demand in the oil market.
What to Expect
An increase in inventories suggests a surplus, which can lead to lower oil prices, while a decrease indicates a deficit, potentially driving prices up.
Thursday 31st October
08:30 ET
US PCE Price Index for September
The US Personal Consumption Expenditures Price Index measures the changes in the prices of goods and services consumed by households.
It is the Federal Reserve’s preferred inflation gauge because it captures a broad range of spending and adjusts for changes in consumer behavior.
The Core PCE Price Index excludes volatile food and energy prices, offering a clearer view of underlying inflation trends.
This index helps guide the Fed’s monetary policy decisions, especially related to inflation targets.
What to Expect
If PCE comes in higher than expected, we would be likely to see weakness in US stocks and strength in the dollar and government bond yields. This is because it could indicate that the Fed needs to keep interest rates higher for longer to make sure that inflation is on a sustainable path back to 2%, and a higher interest rate environment disadvantages US stocks and advantages bond yields, and therefore the dollar.
However if it comes in lower than expected, this could cause strength in US stocks and weakness in the dollar and government bond yields, as it would solidify that the Fed could go ahead and continue with rate cuts.
US Consumer Spending for September
US Consumer Spending refers to the total amount of money spent by individuals and households on goods and services.
It is a key driver of the US economy, making up about two-thirds of GDP.
Changes in consumer spending provide insights into economic growth, as higher spending typically indicates a strong economy, while lower spending may signal a slowdown.
The data is closely watched to gauge consumer confidence and overall economic activity.
What to Expect
Due to Consumer Spending’s contribution to GDP, this release could draw investor attention, with growth and recession fears in focus as the Fed ends it’s tightening cycle.
A higher-than-expected consumer spending number could contribute to higher GDP, which would be likely to cause strength across the US assets, as it solidifies that a recession is not in the base case for the US economy.
The opposite could be true if it comes in lower than expected.
US Weekly Initial & Continued Jobless Claims
The US Weekly Initial & Continued Jobless Claims report provides data on the number of people filing for unemployment benefits.
Initial jobless claims measure new filings, indicating how many individuals are seeking unemployment for the first time, serving as a timely indicator of layoffs.
Continued claims track the number of people still receiving unemployment benefits after their initial filing, reflecting longer-term unemployment trends.
These reports offer insights into the health of the labor market and are closely monitored for economic trends and potential shifts in employment.
What to Expect
With employment in focus at the moment, this report has been garnering a lot of market attention.
A higher jobless claims number, indicating higher unemployment, would be likely to cause weakness across the US assets (dollar, stocks, and yields), as it feeds into the narrative of a hard landing/broader economic slowdown for the US economy as we come out of the tightening cycle.
A lower jobless claims number, indicating lower unemployment, would be likely to cause strength across the US assets, as it reassures the markets that the US economy may be able to exit the tightening cycle and enter the easing cycle without a recession/broader economic slowdown.
Friday 1st November
08:30 ET
US Employment Situation for October
US Nonfarm Payrolls
US Nonfarm Payrolls, commonly referred to as NFP, is a key economic indicator published by the Bureau of Labor Statistics on a monthly basis.
It represents the total number of paid workers in the US, excluding farm employees, government workers, and non-profit organization employees.
The NFP report provides insights into the overall health of the labor market, reflecting changes in employment levels.
The data is closely watched by policymakers, economists, and investors for its impact on financial markets and economic policy decisions.
US Unemployment Rate
The US Unemployment Rate is a widely tracked economic indicator that measures the percentage of the labor force that is unemployed and actively seeking employment.
It is calculated by dividing the number of unemployed individuals by the total labor force.
The Unemployment Rate can differ from the Nonfarm Payrolls data due to differences in their definitions and methods of measurement.
While NFP represents the total number of paid workers in the US, excluding certain categories like farm and government employees, the Unemployment Rate considers the percentage of the labor force that is actively seeking but unable to find employment and is conducted via household surveys as opposed to payrolls data.
US Average Earnings YoY
US Average Earnings Year-over-Year is an economic indicator that measures the annual percentage change in the average earnings of all non-farm employees in the United States.
Average earnings include wages and salaries, and the YoY comparison helps assess the rate of change in workers’ compensation over a one-year period.
Positive growth in Average Earnings YoY is indicative of increasing income levels, while negative growth suggests a decline in average earnings. This data point gives insights into wage trends and their implications for consumer spending and inflation.
What to Expect
The US nonfarm payrolls is the most highly monitored employment indicator by both traders and policymakers.
Employment has been in focus since the last Nonfarm Payrolls report on August 2nd, which showed an unexpected weakening in the labor market, and prompted FOMC officials to pay greater attention to the employment situation.
Since then, markets have been reacting to employment reports for their effect on the broader economy, as opposed to its impact on monetary policy.
With that being said, if Nonfarm Payrolls comes in higher than expected, and the Unemployment Rate comes in lower than expected, there would likely be strength across the US assets (US stocks, dollar, and government bond yields) as it decreases the likelihood of recession/broader economic slowdown, increasing the chances for a soft landing.
If NFP comes in lower than expected, and the Unemployment Rate comes in higher than expected, We would expect weakness across the US stocks, dollar, and government bond yields.
This would solidify the bets of a broader economic slowdown, which increases the chances of a hard landing/recession and would prompt the Fed to move faster and harder in terms of policy response to react to the slowdown in the jobs market.
Keep in mind that the markets will be balancing between the data’s effect on the future of monetary policy, and its effects on the broader economy, which can cause variations/volatility in the reactions.
09:45 ET
US S&P Manufacturing PMI October Final
The US S&P Manufacturing PMI is a monthly economic indicator published by S&P Global that measures the performance of the U.S. manufacturing sector.
It is based on surveys of purchasing managers in manufacturing firms and covers factors such as production, new orders, employment, and supply chain delays.
As a diffusion index, a reading above 50 indicates expansion in manufacturing activity, while a reading below 50 signals contraction.
This PMI provides a snapshot of the health of the manufacturing sector and overall economic conditions.
What to Expect
If we see a meaningful deviation from expectations, markets will be balancing between 2 risks when reacting to this data.
If it comes in higher than expected, we would expect strength in government bond yields, and the US dollar, with the opposite reaction if it comes in weaker.
However, the equity markets will be weighing up the data’s effect on future monetary policy, as well as the broader economy when reacting to this release.
This could cause volatility in the equity markets when responding to this data.
10:00 ET
US ISM Manufacturing PMI for October
The US ISM Manufacturing PMI is a monthly index released by the Institute for Supply Management (ISM) that measures the economic health of the US manufacturing sector.
It is based on surveys of purchasing managers across manufacturing industries, covering key metrics such as production, new orders, employment, and supplier deliveries.
As a diffusion index, a reading above 50 indicates expansion, while a reading below 50 signals contraction.
The ISM Manufacturing PMI is closely watched as a leading indicator of economic activity in the manufacturing sector and overall economic performance.
What to Expect
If we see a meaningful deviation from expectations, markets will be balancing between 2 risks when reacting to this data.
If it comes in higher than expected, we would expect strength in government bond yields, and the US dollar, with the opposite reaction if it comes in weaker.
However, the equity markets will be weighing up the data’s effect on future monetary policy, as well as the broader economy when reacting to this release.
This could cause volatility in the equity markets when responding to this data.
