Week Ahead: Economic Indicators (US)
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Week Ahead: Economic Indicators (US)

For the February 3rd week, here is a list of all of the major economic indicators being released during the US Session


Monday February 3rd
09:45 ET
US S&P Manufacturing PMI
What is it?
Manufacturing sales for 1000 reporting industries The sales statistics form part of a wide monthly report that encompasses information on new orders, backlogs, and inventories.
What is the general effect?
Providing a broad look at manufacturing activity levels. The level of activity in manufacturing can be affected by the level of interest rates, which slows or stimulates the demand for goods and production. Results are generated into a single index, which can range between zero and 100. A reading above 50 signals rising output versus the previous month, and the closer to 100, the faster output is growing.
What to expect?
With the index only just coming back into expansion territory, another print of 50 or above could show healthy signs in the manufacturing sector, which may boost sentiment about the overall economy.
If this is the case and the breakdown of the report does show a healthy manufacturing economy, then you’d likely see both US stocks and the dollar climb.
It’s worth noting that there was no reaction to the latest report (24th of January) that showed manufacturing coming back into expansion.

10:00 ET
US ISM Manufacturing PMI
What is it?
It is the first monthly report on the economy with a focus on manufacturing, put out by the private sector.
What is the general effect?
If there is a pickup in demand for manufactured goods, purchasing managers quickly respond by increasing orders for production materials and other supplies. If manufacturing sales slow, these corporate buys will cut back on their industrial order. It is an effective gauge for turning points in the business cycle and has a close link with GDP. A reading above 50 is believed to be consistent with GDP growth of 2.5%. Every full point in the index above 50 can add 0.3 percentage points or so growth over the year.
What to expect?
The ISM Manufacturing PMI is typically held with more weight when it comes to evaluating the true health of the manufacturing sector in the US.
Currently, the report has maintained it’s contractionary status for quite some time, with the latest report coming close to expansion.
If the report breaks through and shows expansion in the manufacturing sector, it is likely to boost sentiment surrounding the economy, causing US stocks and the dollar to climb.


Tuesday 4th February
10:00 ET
US JOLTS Job Openings
What is it?
It publishes the total number of new hires and layoffs in the month, as well as how many job openings remained in that period.
What is the general effect?
The JOLTS Job Openings shows the ammount of demand on the corporate side for labor by tracking the number of job openings (positions that are waiting to be filled).
When combined with other employment indicator, it can help to paint a more comprehensive picture of the supply and demand dynamics that are at play in the jobs market.
What to expect?
If job openings come in much higher than expected, then it’s clear US companies are looking to expand, which could entail health in the economy.
Which would cause the dollar and yields to rise; however, US stocks are likely to see a more whipsawed reaction due to the balancing act of the economy being healthy and being too healthy and prolonging the Fed’s journey to their 2% inflation target, which could cause them to further slow the rate cut path.
If job openings come in much lower than expected, it’s likely the reverse will happen, with the dollar and yields declining; however, US stocks maintaining a confused reaction with traders weighing up whether just to digest the signs of a weaker economy or the possibility that the Fed open the door for more possible rate cuts to stimulate the economy and get companies hiring again. Most importantly, a relatively inline report is likely to have a muted reaction on the markets, and that’s what we have seen over the past few reports.


Wednesday 5th February
08:30 ET
US Trade Balance
What is it?
A monthly report on exports and imports of goods and services.
What is the general effect?
This data will be incorporated by the Bureau of Economic Analysis into the advance GDP estimates; this data can help reduce the size of revisions to the GDP growth in the second estimates.
What to expect?
This data is unlikely to cause any impact on the market; however, if the data were to show an extreme reliance on imports, it could possibly cause weakness in the GDP figures, which would cause concerns for US economic health. This could cause the dollar, yields, and stocks to all decline.
If there were an extreme case of exports climbing (unlikely to be the overall case as the US is a large importer), then the reaction would be completely opposite.

09:45 ET
US S&P Services PMI
What is it?
The Service PMI release is published monthly. The data are based on surveys of over 400 executives in private sector service companies. The surveys cover transport and communication, financial intermediaries, business and personal services, computing & IT, hotels and restaurants
What is the general effect?
An index level of 50 denotes no change since the previous month, while a level above 50 signals an improvement, and below 50 indicates a deterioration. A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker than forecast reading is generally negative (bearish) for the USD.
What to expect?
If services PMI comes in higher than expected and stays well within the expansion zone, it’s likely to show signs that there’s a lack of warning signs for economic health with consumers causing strength in the dollar and potentially stocks, however if data is too high than stocks may show a little whipsawing

10:00 ET
US ISM Services PMI
What is it?
The US ISM Services Purchasing Managers’ Index is a monthly economic indicator published by the Institute for Supply Management.
It measures the performance of the services sector, which accounts for the majority of the US economy.
The index is based on surveys of purchasing managers in industries such as healthcare, finance, retail, and hospitality.
What are the fundamental effects?
It provides significant information about factors that affect total output growth and inflation.
A reading above 50 shows a growing non-manufacturing sector and below 50 shows contraction in the non-manufacturing sector.
What to expect?
If services PMI comes in higher than expected and stays well within the expansion zone, it’s likely to show signs that there’s a lack of warning signs for economic health with consumers causing strength in the dollar and potentially stocks, however if data is too high than stocks may show a little whipsawing

10:30 ET
Weekly EIA Crude Oil Inventories
What is it?
The US Weekly EIA Crude Oil Inventories report, normally released every Wednesday by the Energy Information Administration, details the amount of crude oil held in storage across the United States.
It provides insights into the supply and demand dynamics of the oil market.
What to expect?
An increase in inventories suggests higher supply or lower demand, potentially leading to lower oil prices. Conversely, a decrease indicates lower supply or higher demand, which can drive prices up.


Thursday 6th of February
08:30 ET
US Weekly Initial & Continuing Jobless Claims
What is it?
Both compiled weekly, initial claims show the number of individuals who filed for unemployment insurance for the first time.
Continued claims measure the total number of unemployed individuals who qualify for benefits under unemployment insurance.
What is the fundamental effect?
An increasing or decreasing trend suggests a deteriorating or an improving labor market. The lower the number of unemployment claims, the stronger the job market. Generally, numbers standing above 400,000 for several weeks could suggest a danger of falling into a recession.
For continued claims, analysts consider a continuing jobless claim’s value that is higher than 3 million to be quite troublesome for the economy.
What to Expect?
The last report did not see much of a market reaction.
Having said that, the jobs market is part of the Fed’s dual mandate, and the Fed are on the look out for any meaningful weakening in the jobs market to potentially prompt a response with US interest rate cuts.
This means that if the Jobless Claims numbers come out  meaningfully higher than expected (indicating higher unemployment) this could lead to weakness in US stocks, and strength in the dollar and government bond yields, as traders may take a weaker labor market as a sign that the Fed may intervene with rate cuts.
If jobless claims come in lower (indicating a lower unemployment) then this will reinforce the past data from the US which shows a resilient labor market, and would likely cause traders to reduce bets on Fed rate cuts, which could cause weakness in US stocks, and strength in the dollar and government bond yields.


Friday 7th February
08:30 ET
US Employment Situation
US Nonfarm Payrolls

What is it?
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
What is it?
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
What is it?
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.
Markets have been reacting to employment reports for their effect on the broader economy, as well as its potential impact on monetary policy, though with the current backdrop of rates being in focus since the last FOMC meeting, we expect the markets will respond to any changes in Interest Rate Futures that may come from this release.
With that being said, if Nonfarm Payrolls come in higher than expected, and/or the Unemployment Rate comes in lower than expected, we would be likely to see weakness in US stocks and strength in the dollar and government bond yields, as this would indicate that the jobs market is not showing signs that could lead the FOMC to intervene with faster rate cuts.
If Nonfarm Payrolls comes in lower than expected, and/or the Unemployment Rate comes in higher than expected, we would expect to see strength in US stocks, and weakness in the dollar and government bond yields, as this could show that the jobs market is beginning to cool off more than the Fed would like, which could lead to increased chances of the US central bank stepping in to supply stimulation through steeper/faster rate cuts in order to make sure the jobs market does not cool down too much.
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.

Canadian Employment Change
What is it?
In Canada, employment change refers to the change in the number of persons who work for pay or profit, or perform unpaid family work. Estimates include both full-time and part-time employment.
Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity.
Canadian Unemployment Rate
What is it?
Measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work.
What to expect?
If Canadian employment change comes in higher than expected, we would expect to see strength in the Canadian dollar and potential weakness in Canadian stocks, as markets pull back on bets for further BoC rate cuts.
If it comes in lower than expected, we would expect the opposite.

10:00 ET
University of Michigan Sentiment
What is it?
Conducted by the University of Michigan, the survey gauges consumers’ attitudes and expectations regarding personal finances, business conditions, and overall economic prospects.
The survey results are presented as an index, with higher values indicating greater consumer confidence.
In this report, respondents can also give their forecasts for 1-year and 5-10-year ahead inflation expectations, which the markets sometimes pay attention to.
What to expect?
When it comes to the headline sentiment read, a higher consumer sentiment number at the moment would be seen as bullish for US stocks and the dollar, as it indicates that the consumer is feeling good about the economic environment, which reduces the chances for a hard landing coming out of this Fed tightening cycle.
When it comes to inflation expectations, the markets will want to see these coming in lower than expected, which would increase confidence in the Fed’s ability to reduce rates and start to stimulate the areas of the economy that have shown weakness.
This would likely cause strength in US stocks.