Week Ahead: Economic Indicators 4th – 8th August (US)
Monday 4th August
08:30 ET
US Factory Orders for June
The Factory Orders report from the U.S. Census Bureau tracks the monthly change in total new orders, shipments, unfilled orders, and inventories from domestic manufacturing firms. It provides insight into production activity and business investment trends, complementing the Advance Durable Goods release.
Summary of Last Report (May)
Total factory orders rose 8.2% month-over-month, rebounding from a revised −3.9% drop in April, and slightly above forecasted gains (~8.1%).
New orders for manufactured goods rose 8.2% to $642.0 billion, driven by an increase of $48.5 billion.
Shipments edged up 0.1% to $599.4 billion, while unfilled orders climbed 3.4% to $1,455.4 billion. Inventories rose 0.1% to $944.1 billion.
In June durable goods detail (released later): orders fell 9.3%, largely because transportation equipment plunged 22.4%, including a 51.8% drop in nondefense aircraft orders. Excluding transportation, durable goods rose 0.2%, while core capital goods orders (excluding defense & transport) fell 0.7%; shipments of core goods rose 0.4%.
Overall, May marked a sharp pickup following April’s steep decline, though June’s data reveals volatility—especially in aerospace—and a moderation in business investment trends.
What to Expect
US Stocks
If factory or durable goods orders come in higher than expected, equities may rally on signs of strong business investment; if they are weaker than expected, stocks could decline, highlighting reduced corporate demand.
US Dollar
A stronger-than-expected factory orders report typically strengthens the USD, signalling economic resilience; a weaker-than-expected read may weaken the dollar, suggesting softer growth and reduced rate expectations.
Government Bonds
If factory orders data is stronger, bond prices may fall (yields rise) as investor appetite shifts toward risk; if weaker, bond prices tend to rise (yields fall) on expectations of slower growth and looser policy.
Federal Reserve Policy
Stronger factory and durable goods orders may support a more hawkish Fed stance, reinforcing confidence in economic momentum and delaying rate cuts; softer readings could strengthen confidence in a dovish tilt and later rate reductions.
Tuesday 5th August
08:30 ET
US Trade Balance for June
The U.S. Trade Balance (on a combined goods and services basis) measures the difference between exports and imports of goods and services. A deficit occurs when imports exceed exports, signaling net foreign spending on U.S.-produced goods and services. It’s a key indicator of international competitiveness and can influence currency valuation, economic growth, and trade policy.
Summary of Last Report (May)
The goods and services trade deficit rose to $71.5 billion in May, up from a revised $60.3 billion in April—a surge of $11.3 billion.
Exports fell by $11.6 billion to $279.0 billion, a 4.0% month-over-month decline.
Imports edged down only $0.3 billion to $350.5 billion, a marginal 0.1% decrease.
Within goods trade, the deficit expanded to $97.5 billion, while the services surplus shrank slightly to $26.0 billion.
What to Expect
US Stocks
If the trade deficit widens more than expected, equities may decline, reflecting concerns over weak external demand and potential downward pressure on growth; if the deficit narrows more than expected, stocks could advance as export strength suggests improving global demand.
US Dollar
A larger-than-expected trade deficit may weaken the USD, as increased external demand for foreign goods exerts downward pressure on the currency; a smaller-than-expected deficit could strengthen the dollar, suggesting firmer external demand and balanced trade flows.
Government Bonds
If the trade deficit widens more than expected, bond prices may rise (yields fall) as markets anticipate slower economic growth and potential Fed dovishness; if the deficit narrows, bond prices may fall (yields rise) on expectations of stronger growth and tighter policy.
Federal Reserve Policy
A wider-than-expected deficit could bolster a dovish Fed stance, reinforcing arguments for delaying rate hikes or considering cuts; a narrower-than-expected trade gap may support a hawkish tilt, suggesting external momentum and reinforcing policy restraint.
09:45 ET
US S&P Services PMI July Final
The S&P Global U.S. Services PMI is based on a monthly survey of over 400 private-sector service companies, measuring business activity, new orders, employment, prices, and more. A reading above 50 indicates expansion, below 50 signifies contraction. It provides timely insight into the health of the dominant U.S. services sector and inflation trends.
Summary of Last Report (July Prelim)
Services PMI: 55.2, up from 52.9 in June and well above the consensus of 53.0, pointing to a strong expansion in service-sector activity.
This reading marks the highest level in seven months, supported by broad demand and acceleration across services despite manufacturing languishing.
Input and output price pressures rose further, driven by rising wages and tariff impacts on costs passed through to clients.
The strong July readings suggest resilient consumer and business service demand, offsetting persistent weakness in manufacturing and reinforcing inflationary pressures.
What to Expect
US Stocks
If the Services PMI prints higher than expected, equities may rally, especially in consumer and service-oriented sectors; if the PMI comes in lower than expected, stocks could decline, signaling softer momentum.
US Dollar
A stronger-than-expected PMI should strengthen the USD, as robust service-sector demand supports economic resilience; a weaker-than-expected reading may weaken the dollar, indicating reduced inflation and growth outlook.
Government Bonds
If the PMI is above expectations, bond prices may fall (yields rise), pricing in higher inflation risks and delayed rate cuts; if below expectations, bonds could rise (yields fall), reflecting anticipated dovish policy.
Federal Reserve Policy
A stronger-than-expected PMI could reinforce a hawkish Fed stance, suggesting persistent inflation and delaying rate cuts; if weaker-than-expected, it may bolster a dovish tilt, increasing confidence in potential rate reductions later in 2025.
10:00 ET
US ISM Services PMI for July
The ISM Services PMI (Institute for Supply Management Non-Manufacturing PMI) is a monthly survey of over 370 purchasing and supply executives across more than 62 service industries. It measures service-sector performance across business activity, new orders, employment, prices, and supplier deliveries. A reading above 50 indicates expansion; below 50 signals contraction.
Summary of Last Report (June)
Services PMI: 50.8, up from 49.9 in May, marking a return to expansion territory. Forecast was also 50.8.
Business Activity: 54.2, indicating stronger growth in service-sector activity.
New Orders: 51.3, rebounding from contraction in May.
Employment: 47.2, slipping back into contraction territory.
Supplier Deliveries: 50.3, indicating slower delivery times.
Prices Index: 67.5, down slightly from May’s 68.7, but still elevated.
Inventories Index: 52.7, showing expansion.
Sub‑components suggest improving demand but continued cost pressures and weak employment.
What to Expect
US Stocks
If the Services PMI prints higher than expected, equities—especially in consumer and service-oriented sectors—may rally, reflecting robust demand; if the PMI comes in lower than expected, stocks could decline, signaling weaker momentum.
US Dollar
A stronger-than-expected PMI may lead to a stronger USD, as it supports confidence in U.S. economic resilience; if the reading is weaker than expected, the currency could weaken, signaling slower growth and lower inflation pressure.
Government Bonds
If the PMI exceeds expectations, bond prices may fall (yields rise) as investors price in sustained inflation risk and delayed rate cuts; if it is weaker than forecast, bond prices may rise (yields fall) amid anticipated dovish Fed policy.
Federal Reserve Policy
A stronger-than-expected reading could reinforce a hawkish Fed stance, delaying rate cuts; a weaker-than-expected result may support a dovish tilt, increasing confidence in rate reductions later in 2025.
Wednesday 6th August
10:30 ET
US Weekly EIA Crude Oil Inventories
The EIA Weekly Crude Oil Inventories report tracks changes in U.S. commercial crude oil stockpiles (excluding the Strategic Petroleum Reserve). Published each Wednesday by the U.S. Energy Information Administration, it’s a key gauge of supply-demand dynamics that can sharply impact oil prices.
Summary of Last Report
Crude inventories fell by 3.2 million barrels to 419 million barrels, far exceeding the expected draw of around 1.6 million barrels.
Gasoline stocks declined by 1.7 million barrels to 231.1 million, also twice expectations of a smaller draw.
Distillate inventories rose by 2.9 million barrels, against forecasts for a modest decline.
Crude oil stocks are approximately 9% below the five-year seasonal average, indicating tighter supply conditions.
What to Expect
Oil Prices
If the inventory draw is larger than expected, oil prices are likely to rally, reflecting tightening supply sentiment; if the decline is smaller than expected or inventories build, prices may sell off on signs of weaker demand.
Energy Stocks
If the inventory decline is greater than forecast, energy stocks—especially oil producers and refiners—may advance, as sharper draws improve margin outlooks; if the draw is less than expected or stocks rise, energy equities could slide amid demand concerns.
Thursday 7th August
08:30 ET
US Weekly Initial & Continued Jobless Claims
Initial Jobless Claims represent the number of people filing for unemployment benefits for the first time in a given week, while Continued Claims track those who remain on benefits in subsequent weeks. This weekly release, issued by the U.S. Department of Labor, is a high-frequency indicator of labor market conditions.
Summary of Last Report
Initial Claims: 217,000, a decline of 4,000 from the prior week and the lowest level since mid-April. Economists had forecast around 226,000, making this a stronger-than-expected read.
4‑Week Average of Initial Claims: 224,500, down 5,000 from the prior week.
Continued Claims: 1,955,000, up by 4,000 compared with the previous week. The 4-week average stood at 1,954,000, down around 2,250.
Markets view the drop in initial claims as a sign of labor market resilience, even as continued claims ticked higher, indicating that those laid off face longer unemployment spells.
What to Expect
US Stocks
If initial claims come in higher than expected, equities may decline, signaling increasing layoffs and labor stress; if they come in lower than expected, stocks may rally, reflecting sustained labor market strength.
US Dollar
Higher-than-expected claims may weaken the USD, as they suggest economic softening and lower rate expectations; lower-than-expected claims may strengthen the dollar, reinforcing confidence in a robust labor market.
Government Bonds
If claims come in higher than expected, bond prices are likely to rise (yields fall), as markets anticipate slowing growth and potential Fed policy easing; if claims are lower than expected, bond prices may fall (yields rise) as fewer rate cuts are priced in.
Federal Reserve Policy
Stronger-than-expected initial claims may support a more dovish Fed policy stance, possibly accelerating expectations for rate cuts; weaker-than-expected claims would reinforce a hawkish tone, delaying cuts until clear signs of labor-market weakening emerge.
Friday 8th August
08:30 ET
Canadian Employment Change & Unemployment Rate for July
The Canadian Labour Force Survey (LFS), conducted by Statistics Canada, measures monthly changes in employment, unemployment (job‑seeking individuals), labour force participation, and hours worked. It is the primary source for assessing Canada’s labour market conditions and informs the Bank of Canada’s policy decisions.
Summary of Last Report (June)
Employment Change: +83,100 jobs (a 0.4% increase), marking the first net gain since January—driven largely by part-time roles with full‑time positions also rising.
Unemployment Rate: fell to 6.9%, down from 7.0% in May—surprising expectations of a rise to 7.1%.
Employment Rate: edged up to 60.9% (+0.1 percentage point).
Average Hourly Wages (permanent employees): rose 3.2% year-over-year to approximately C$37.22, reflecting moderate wage growth.
Wholesale & retail trade: +33,600 jobs
Manufacturing: +10,500 jobs
Health & social assistance: +16,700 jobs
Transportation: −3,400 jobs
Agriculture: −6,000 jobs
While long-term unemployment remains elevated—over 20% of unemployed individuals have been jobless 27 weeks or more—the unexpected job growth and stable labour force participation suggest resilient labour market conditions.
What to Expect
Canadian Stocks
If employment growth exceeds expectations, equities—particularly consumer, retail, and industrial stocks—may rally, reflecting confidence in domestic demand; if hiring surprises to the downside, stocks could decline on fears of slowing momentum.
Canadian Dollar
A stronger-than-expected employment gain usually strengthens the CAD, signaling a resilient economy; weaker-than-expected jobs data may weaken the dollar, suggesting downside to growth and policy prospects.
Canadian Government Bonds
If jobs data is stronger, bond prices may fall (yields rise) amid reduced odds of near-term rate cuts; if weaker, bonds could rise (yields fall) as markets price in potential Bank of Canada easing.
Bank of Canada Policy
Employment surprise upside may support a neutral or slightly hawkish tone, reducing probability of rate cuts in July; softer data would reinforce expectations of a dovish shift and increase room for rate easing later in 2025.
