(Bloomberg) — Federal Reserve policymakers’ appetite for another big interest rate cut in November could become more visible next week, when Jerome Powell addresses economists and the government releases new employment figures.
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The chairman of the Federal Reserve will discuss the U.S. economic outlook at a National Association for Business Economics conference on Monday. At the end of the week, the September employment report is expected to show a healthy, albeit subdued, labor market.
Payrolls in the world’s largest economy are expected to rise by 146,000, according to the median estimate in a Bloomberg survey of economists. This is similar to the August increase and would leave three-month average job growth near its weakest level since mid-2019.
The unemployment rate likely remained at 4.2%, while average hourly earnings are expected to have increased 3.8% from a year ago.
Recent labor unrest suggests that Friday’s jobs report may be the last clear reading on the U.S. labor market before Fed policymakers meet in early November. Workers at Boeing Co. factories went on strike in mid-September, and dockworkers on the Atlantic and Gulf coasts are threatening to strike starting Oct. 1.
In addition to the important monthly payrolls report, Tuesday’s job openings data is expected to show August openings remained near the lowest level since early 2021. Economists will also focus on the rate of resignations and layoffs to evaluate the extent of the cooling in labor demand.
What Bloomberg Economics says:
“We expect strong non-farm payrolls data for September, which could even revive rumors of a “non-landing” for the US economy. “But we believe the headline number will overstate the strength of the labor market, in part due to exaggerations related to the BLS ‘birth-death’ model, and in part due to temporary seasonal effects.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins, economists. For the full analysis, click here
Industry surveys will also help shed light on private sector hiring. The Institute for Supply Management releases its September manufacturing survey on Tuesday and the services index two days later, both of which include employment measures.
In Canada, home sales data from several of the country’s largest cities (Toronto, Calgary and Vancouver) will offer a glimpse into how the housing market is faring after a series of rate cuts by the central bank.
Elsewhere, data expected to show a slowdown in global inflation (from the eurozone to Turkey and South Korea), as well as business surveys in China, are among the highlights.
Click here to see what happened last week and below you’ll find a summary of what’s coming up for the global economy.
Asia
China kicks off a series of purchasing managers’ indexes on Monday, a week after authorities unleashed an unusually broad set of stimulus measures that sent stock prices soaring.
The official manufacturing PMI may rise while remaining contractionary, and Caixin indicators are seen remaining stable just above the boom-bust line.
Manufacturing PMI figures will be released a day later in Indonesia, Malaysia, Thailand, Taiwan, Vietnam and the Philippines.
In Japan, Shigeru Ishiba is expected to be named prime minister in a parliamentary vote on Tuesday.
The Bank of Japan’s Tankan survey will likely show that business confidence in large companies remained optimistic in the third quarter, while small manufacturers remained slightly pessimistic. Companies are seen revising their capital spending plans a little more.
South Korea’s inflation is expected to have cooled in September, giving the central bank additional incentive to consider a pivot to a rate cut in October, while price growth in Pakistan may have slowed to pace. slowest since early 2021.
Australia, Sri Lanka and South Korea will release trade data, and Vietnam will release third-quarter gross domestic product and September inflation next weekend.
Europe, Middle East, Africa
Eurozone data will take center stage. With inflation in France and Spain now below the European Central Bank’s 2% target, reports from Germany and Italy on Monday will be closely watched, followed by the region’s overall result on Tuesday.
Now that traders are pricing in a rate cut at the ECB’s October meeting, and economists are starting to change forecasts to predict the same, the data will be crucial evidence for policymakers who had previously leaned toward December for your next move.
Meanwhile, industrial production figures from France and Spain on Friday will give an idea of how weak manufacturing was during the quarter that is about to end.
The week features a host of appearances by the ECB, beginning on Monday with President Christine Lagarde’s testimony before the European Parliament and followed the next day by a conference in Frankfurt hosted by the central bank.
Monday will be the last day in office for Swiss National Bank President Thomas Jordan, who has just overseen a rate cut and a sign of more to come. His replacement, Martin Schlegel, will succeed him and the first inflation data under his watch will be published on Thursday.
In Sweden, minutes from the Riksbank meeting on Tuesday, September 24, will provide more insight into why authorities decided to cut rates last week and open the door to a faster pace of easing in the coming months.
The UK has a relatively quiet week ahead, with appearances by Bank of England chief economist Huw Pill and policymaker Megan Greene among the highlights.
Turkish inflation forecast for Thursday likely slowed to 48% in September. That would be below the central bank’s key rate (currently at 50%) for the first time in years. While it is a sign of progress, officials still have work to do to reach an inflation goal of less than 40% by the end of the year.
A series of monetary decisions have been scheduled throughout the region:
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Mozambique’s central bank will cut borrowing costs for a fifth straight meeting on Monday, with price growth expected to slow amid relative currency stability and a recent drop in oil prices. The spread between the benchmark and inflation is the widest among the central banks tracked by Bloomberg.
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Icelandic officials are expected to keep their rate at 9.25% on Wednesday, extending the maintenance of Western Europe’s highest borrowing costs to more than a year. Local lenders Islandsbanki hf and Kvika banki hf predict that Sedlabanki will begin to ease at this year’s final meeting, scheduled for November 20.
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On the same day, Polish officials are expected to leave borrowing costs unchanged as they begin to coalesce around resuming cuts in the first quarter of 2025.
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On Thursday, Tanzania’s central bank will likely keep rates steady due to the inflationary impact of the current currency weakness. Its shilling has depreciated more than 3% against the dollar since July.
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Romania’s central bank meets on Friday and could further reduce borrowing costs ahead of a reshuffle of the nine-member board, whose terms are set to expire on October 15.
Latin America
Colombian authorities will almost certainly achieve a seventh consecutive rate cut on Monday, matching their longest easing cycle in more than two decades.
Economists anticipate a fifth consecutive half-point cut, to 10.25%, and say the easing cycle still has room to continue with inflation figures and expectations declining. The bank publishes the minutes of the meeting three days later.
Most analysts expect Chile’s data dump – seven separate indicators including industrial production, retail sales, copper production and GDP estimates – to show the economy gaining momentum heading into the end of the year.
Consumer prices in Lima, Peru’s capital, likely remained just above the 2% midpoint of the central bank’s inflation target range in September.
Peru’s central bank chief Julio Velarde has said the year-end reading should be between 2% and 2.2%, and that the key rate may fall about 100 basis points below the benchmark index. Federal Reserve.
In Brazil, three purchasing managers’ indices and industrial production data can be expected to show that Latin America’s largest economy is performing well and above its potential growth rate.
The reports on the primary and nominal budget balance come at a time when the country’s public finances have once again become a hot topic.
–With assistance from Paul Wallace, Demetrios Pogkas, Ragnhildur Sigurdardottir, Brian Fowler, Robert Jameson, Jane Pong, Laura Dhillon Kane, Piotr Skolimowski, Monique Vanek and Niclas Rolander.
(Updates with the United Kingdom in the EMEA section)
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