U.S. Payrolls Hinge on Progress With Record Vacancies: Eco Week

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Employers in the U.S. probably stepped up their hiring in September after lackluster jobs growth a month earlier, illustrating gradual yet choppy progress toward filling a record number of vacancies.

Payrolls increased by about half a million last month, almost twice as much as in August, according to the median projection in a Bloomberg survey of economists. The unemployment rate is forecast to have fallen to 5.1% from 5.2%.

Friday’s report from the Labor Department is expected to show a jobs market that continues to improve at an uneven pace. Despite unprecedented openings and faster wage growth, health concerns related to the coronavirus, skills mismatches and high turnover have kept payrolls below pre-pandemic levels.

What Bloomberg Economics Says:

“Next week’s nonfarm payroll report (Friday) -- the only new jobs report FOMC participants will get before the November meeting -- will be the decisive datapoint that will seal the taper deal.”

--Anna Wong, Andrew Husby, Eliza Winger and Niraj Shah. For full analysis, click here

Other U.S. data due this coming week include figures on September services activity and the August trade deficit.

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

Elsewhere, global negotiators meeting to agree on a new landscape for corporate taxation will try to keep their ground-breaking deal alive in a crucial Oct. 8 gathering. Meanwhile, central banks in New Zealand, Iceland and Peru are among those likely to raise interest rates among several decisions due, and Japan may get a new finance minister. 

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

Asia

Japan’s long-serving finance minister, Taro Aso, is likely to be replaced early in the week as incoming Prime Minister Fumio Kishida forms his cabinet. Analysts also see Kishida announcing a fresh stimulus package to help support Japan’s recovery. 

In South Korea, investors expect another above-target inflation reading in Tuesday’s CPI data to bolster the case for a further interest-rate hike in the final months of the year. 

The Reserve Bank of Australia meets Tuesday and is set to leave its main policy levers unchanged, even as surging home prices drive calls for lending curbs. 

In contrast, New Zealand’s central bank meets Wednesday and is likely to raise interest rates to address its own frothy property market. India’s central bank meets Friday. 

China is out for much of the week for national holidays; high-frequency spending data will be closely scrutinized to gauge the health of consumption over the break.

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

Europe, Middle East, Africa

Inflation and what to do about it will be a predominant theme throughout the region in the coming week, as four central banks around Europe take decisions confronting the danger of price increases getting out of control. 

That’s what Romanian policy makers will consider when they meet on Tuesday; they’re likely to keep rates unchanged. In Poland on Wednesday, economists expect the central bank to consider raising borrowing costs but not this time, despite the fastest inflation in 20 years. 

The same day, Icelandic policy makers are likely to lift rates for the third time since May, when they were first in western Europe to tighten since the pandemic. And on Thursday, Serbia’s central bank faces pressure to do the same amid a spike in inflation there too. 

European Central Bank policy makers insist a surge in prices that reached a 13-year high in September will be temporary. Minutes of their September decision, to be released on Thursday, will allow investors to gauge the strength of that conviction. The same day, ECB and Cleveland Fed officials will address a joint conference studying inflation. 

Data due in western Europe will include German and French industrial production, which will show the impact of global supply bottlenecks on output in the region. 

Elsewhere, inflation data will take precedence. Hungary may see further acceleration, putting renewed pressure on policy makers to continue tightening. In Turkey, any pickup in core inflation could narrow the central bank’s room to maneuver as President Recep Tayyip Erdogan keeps pushing for rate cuts. Russia’s data on Wednesday will also be watched closely as food and other prices continue to rise. 

Finally, the Bank of Israel is likely to hold rates steady on Thursday but may provide clues about its foreign-exchange and dollar-purchasing programs, which are close to being exhausted.

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

Latin America

On Monday, Colombia’s central bank posts the minutes of Thursday’s meeting, at which it raised its key rate by 25 basis points from a record low to 2%, while inflation data later in the day may show a slight acceleration from the current 4.44%, well over the 3% target. 

Brazil’s industrial output and retail sales data for August may weaken as consumer and manufacturing sentiment soured and construction and services confidence retreated.

Chile’s economy is overheating, so look for September’s inflation reading to surge past 5%, nearing the highs of the last decade.

Inflation in Mexico is expected to push up near 6%. Economists surveyed by Banxico now see it at 6.1% come year-end. 

Peru’s central bank on Thursday, facing the fastest inflation in over a decade, may point to a sharper tightening cycle after last month’s 50bps hike took the key rate to 1%.  

Data out Friday may show that Brazil’s benchmark IPCA price index pushed over 10% in September, rising for a 16th straight month to match a 1992-1994 run -- a period when annual inflation rose over 4,900% -- as the country’s longest.

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

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