U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week

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All eyes will be on Friday’s U.S. jobs report as investors and policy makers alike look for meaningful labor market improvement after two months of data that came in much lower than expected.

Payrolls may have risen by 700,000 in June, according to the median estimate in a Bloomberg survey of economists. That would be the biggest increase since March, but forecasts should be taken with a grain of salt -- predictions in both April and May were well above the actual figures.

U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week


States including California and New York lifted all remaining pandemic-related restrictions in June, which could have boosted new employment in the month. That said, many businesses have reported hiring challenges due to ongoing childcare responsibilities, enhanced federal unemployment benefits and lingering health concerns.

Federal Reserve officials are also focused on jobs data as they work to achieve maximum employment.

In a congressional hearing Tuesday, Chair Jerome Powell said that “the very quick job gains of the early recovery essentially involved going back to your old job.”

“Now it’s actually finding new jobs and that’s a matching function that is more labor intensive and time consuming,” he said.

What Bloomberg Economics Says:

“After payrolls disappointed in April and May, our estimates show hiring growth accelerated in June as the supply of available workers expanded. The economy is reopening at a rapid pace, resulting in increased demand for discretionary services. We expect recreation, accommodation and food services to have contributed to the bulk of net hiring. In addition, seasonal factors should have helped government payrolls as fewer-than-usual educational workers were cut at the end of the school year.”

--Andrew Husby, Yelena Shulyatyeva, Eliza Winger and Niraj Shah. For full preview, click here

Elsewhere, euro-area data are likely to show inflation at about the European Central Bank’s target, central bankers including ECB President Christine Lagarde and Bank of England Governor Andrew Bailey are scheduled to speak and Colombia and Sweden set interest rates.

Click here for what happened last week and below is our wrap of what is coming up in the global economy.

U.S. and Canada

In the run up to the U.S. jobs report, data on pending home sales, ADP private employment and ISM manufacturing gauges are due. New York Fed President John Williams, Richmond Fed President Thomas Barkin, Atlanta Fed President Raphael Bostic and Fed Vice Chair for Supervision Randal Quarles are scheduled to speak.

In Canada, monthly GDP data will show the extent of the second-quarter slowdown.

  • For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Asia

With less than a month to go before the Tokyo Olympics starts, production, sales and jobless figures for May will show how Japan’s economy is faring in the run up to the games as double-dip fears ease.

The Bank of Japan will release an early sketch of opinions from its June meeting where it flagged a new lending measure to tackle climate change and extended its Covid-crisis support. Its Tankan business survey will show if Japan Inc. sentiment is continuing to improve as the vaccine drive kicks into gear.

U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week

RBA chief Philip Lowe takes part in a panel on Wednesday, likely offering his last comments before the central bank hunkers down to decide on its bond buying and yield control next month.

South Korea’s trade and inflation figures for June could further fuel rate hike talk there.

China’s official PMI on Wednesday will be closely watched to see how the nation’s factories are handling the ongoing margin squeeze caused by surging input prices, while regional reports follow the next day. Data published Sunday showed China’s industrial profit growth slowed in May as base effects from last year eased and businesses faced rising costs.

  • For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, Africa

Euro-zone inflation data due on Wednesday may turn out around the ECB’s definition of price stability of below but close to 2%. Officials are likely to reiterate their view that a recent surge is temporary and shouldn’t deflect them from keeping up extraordinary stimulus to drive home the economy’s rebound from the pandemic.

Several of them have an opportunity to share their opinion in the coming days, including the central bank governors of Germany and France, as well as ECB President Lagarde herself. She is due to speak at a conference in France on Friday.

U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week

Her U.K. counterpart, BOE Governor Bailey, will address an event in London on Thursday. That after last week’s decision to maintain a policy stance similar to the ECB: continued stimulus, backed by an insistence that surging inflation won’t last and that a recovery shouldn’t be derailed by tightening.

His outgoing colleague Andy Haldane, the BOE’s chief economist, may be less sanguine about consumer prices. The only U.K. policy maker arguing this month to dial down stimulus, he will speak twice this week, and might reiterate his view that Britain finds itself at a “dangerous moment.”

Sweden’s Riksbank will deliver a monetary decision on Thursday where officials are likely to keep the rate at zero even as the economy approaches its pre-crisis level of output.

In Kenya, data will likely show inflation well below the 7.5% limit of the central bank’s target range, even as it continues to tick up.

That may give policy makers room to keep the benchmark rate unchanged when they meet next month as they seek to support the economy’s recovery from the effects of the coronavirus pandemic.

Saudi Arabia reports first-quarter unemployment data on Wednesday. The jobless rate dropped to 12.6% at the end of last year, down from a pandemic-era peak of 15.4% but still well above the government’s target of 9% set five years ago.

  • For more, read Bloomberg Economics’ full Week Ahead for EMEA

Latin America

Look for Colombia’s central bank to keep its key rate at a record-low 1.75% for a seventh straight meeting. Prices and inflation expectations are rising even as a resurgence of the pandemic and civil unrest chip away at 2021 GDP forecasts. The minutes of the meeting and unemployment data are due Wednesday.

U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week

Abundant credit and consumer demand are rippling through Chile’s economy with this week’s proof to be found in data on employment, sales, commercial activity, manufacturing, industrial output and the monthly GDP proxy.

Argentina’s first-quarter output was better than expected, but a resurgence of the virus likely depressed economic activity in April. Data due Tuesday will reveal the extent of any damage.

U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week

Reports out Tuesday will likely show Brazil’s broadest measure of inflation and wholesale prices slowed from multi-decade highs, while budget and debt figures should be in line with the better tone seen so far in 2021.

Finally, Brazil’s industrial output may have recorded the second positive month-on-month result of 2021 while employment data will underscore the economy’s K-shaped recovery, with strong growth in the formal labor market set against what’s forecast to be a record-high jobless rate.

  • For more, read Bloomberg Economics’ full Week Ahead for Latin America

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