US Job Growth Due for Snapback After Storms and Strike

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(Bloomberg) — U.S. hiring likely jumped in November after hurricanes and a major strike undermined job growth the previous month, consistent with a labor market that was healthy but gradually cooling.

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Nonfarm payrolls likely rose by 200,000 in November, according to a Bloomberg survey of economists. Data scheduled for release on Friday are also expected to show the unemployment rate holding steady at 4.1%.

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On Wednesday, Federal Reserve Chairman Jerome Powell participates in a moderated discussion, and investors will await any assessment of the labor market and inflation as well as clues on whether the US central bank will cut interest rates in December.

As the strike settles at Boeing and recovery efforts begin after Hurricanes Helen and Milton hit the southern United States, the November employment report should include fewer warnings than the previous month. However, a steady decline in open positions and moderation in salary growth, coupled with recent layoffs at Boeing and planned job cuts at General Motors, point to a broader decline.

Statewide employment data showed that October’s payroll decline was most pronounced in Florida and Washington, reflecting hurricanes and industrial action, respectively. But a total of 29 states have cut jobs, among the highest monthly numbers since the pandemic.

What Bloomberg Economics says:

“The November jobs report is likely to be an improvement over October, but not the kind of strong recovery one would expect if the weakness in October was due to temporary factors. The underlying pace of job growth is likely to be lower than what is needed to stabilize the rate of Unemployment – ​​which we still expect to reach 4.5% before the end of the year.

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—Anna Wong, Stuart Ball, Eliza Wenger, Estelle Au, and Chris J. Collins. For the full analysis, click here

The latest numbers on job openings and layoff announcements will precede Friday’s employment report. The Institute for Supply Management will also release its latest readings on activity in the manufacturing and services sectors, while the Federal Reserve will release its Beige Book survey of regional conditions.

In addition to Powell, Fed Governor Christopher Waller is scheduled to speak at the central bank’s framework conference on Monday. Other Fed officials appearing during the week include John Williams, Alberto Muslim, Adriana Kugler, Beth Hammack, Mary Daly, Austan Goolsby, and Michelle Bowman.

In Canada, November jobs numbers will be the last major data point before the interest rate decision on December 11. The October report showed small gains that fell short of expectations, underscoring weak employment. Meanwhile, the Canadian Society for Business Economics conference will bring together leading economists.

Elsewhere, the OECD will publish new economic forecasts on Wednesday, European Central Bank President Christine Lagarde will testify before lawmakers on the same day, and a slew of inflation and growth numbers are due from Australia to Switzerland.

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Click here to find out what happened last week. Below is a summary of what will happen in the global economy.

Asia

Asia gets a string of PMI numbers to start the week, with reports on Monday from South Korea, Indonesia, Malaysia, the Philippines, Thailand, Taiwan and Vietnam.

China gets Caixin PMIs in two batches, starting Monday with a measure of manufacturing, which has bounced between the boom-or-bust 50 level for the past four months.

Australia will be in the spotlight on Tuesday with the release of current account data that could impact third-quarter GDP statistics due the following day.

GDP figures are expected to show a marginal acceleration in growth after a tepid performance in the previous period, with the consensus estimate of growth of 0.5% from the previous quarter and 1.1% versus the previous year.

Elsewhere, South Korea is also getting GDP data and Japan is seeing several sets of corporate numbers in the third quarter, including key capital spending data that will give direction on how to revise GDP data for the period.

Japan also publishes cash earnings and household spending data for October, with attention focused on whether a persistent decline in real wages will impact spending.

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South Korea’s consumer inflation figures are expected to show price growth of 1.7%, the third straight month below the central bank’s target.

CPI reports are also issued by Thailand, Vietnam, Taiwan, the Philippines, Indonesia, Pakistan and Kazakhstan.

Trade data is scheduled to be released from South Korea, Australia, Pakistan and Vietnam. Among central banks, the Reserve Bank of India is likely to hold steady on Friday, while Bank of Japan board member Toyoaki Nakamura will deliver a speech on Thursday.

• For more, read Bloomberg Economics’ full report on next week for Asia

Europe, Middle East, Africa

ECB President Christine Lagarde’s testimony before the European Parliament may be a highlight. Wednesday’s appearance will allow her to deliver the final word before the blackout begins ahead of the interest rate decision on December 12, when a quarter-point cut is widely expected.

The questions you will face may relate to the path of inflation, which has just jumped to its highest level in four months.

Indicators of private sector strength will attract the most attention in the euro area. Surveys of purchasing managers in Italy and Spain will be published on Monday for manufacturing and on Wednesday for services.

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Industrial production figures for France and Spain are scheduled for release on Thursday, while German production figures are scheduled for release on Friday.

Outside the Eurozone, there are some notable inflation numbers on the calendar. On Tuesday, Switzerland’s index is expected to accelerate slightly to 0.7%, while the Swedish policymakers’ index is expected to jump to 1.9% when it is released on Thursday.

In Turkey on Tuesday, the central bank hoped annual inflation would slow enough in November from the previous reading of 48.6% to allow for a possible interest rate cut in late December, marking the start of an easing cycle. Investors will also be closely watching the monthly measure, which reached 2.9% in October and is officials’ favorite measure.

On the same day, South Africa will publish its third-quarter gross domestic product, the first indication of the impact the coalition government formed by the African National Congress in June is reversing years of stagnant growth. The central bank believes the economy grew by 0.5% in the quarter versus 0.4% in the previous three months.

Russia’s manufacturing PMI, due for release on Monday, will indicate the health of the country’s war-focused economy.

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• For more, read next week’s full Bloomberg Economics EMEA report

A number of pricing decisions are scheduled to be made across the region:

• Poland’s central bank will set borrowing costs on Wednesday, with no change expected. Gov. Adam Glabinski briefs reporters the next day.
• Also on Wednesday, Namibia, whose currency is pegged to the rand and has seen inflation slow, is expected to follow South Africa’s lead and cut its interest rate by a quarter of a percentage point.
• Botswana, which has one of Africa’s lowest inflation rates at 1.6%, is on Thursday set to keep borrowing costs steady amid expectations that price pressures could rise as the economy recovers from a prolonged decline in diamond prices.

latin america

The output report will be highlighted in Brazil. Faster-than-expected GDP readings in the July-September period prompted analysts to double their forecast for third-quarter growth, to just under 4%.

Surveys of economists’ forecasts from central banks in Argentina, Brazil and Mexico are available, along with biweekly Citi readings of analysts covering Mexico.

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Expectations on borrowing costs and inflation in Brazil are softening, while a Citi poll may show more converts to the view that Banxico doubles the pace of easing in December to 50 basis points.

In separate reports in Brazil, the early consensus among analysts was that industrial production for October was close to 6%, while readings on three separate purchasing managers’ indexes have been hovering above 50 all year.

Chile’s September GDP reading reached its lowest level in two years after August’s negative reading, indicating a weak start to the fourth quarter.

The week is likely to end well for the region’s two major central banks: Data released on Friday are expected to show consumer prices fell in both Chile and Colombia last month.

As for the latter, annual inflation has slowed in 17 of the past 19 months from a cycle peak of 13.34%.

• For more, read the full Latin America Week from Bloomberg Economics

-With assistance from Brian Fowler, Monique Vanek, Robert Jameson, Laura Dillon Kane, and Piotr Skolimowski.

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