The marquee event on the week’s economic calendar is Friday’s jobs report, which will reveal whether employers are continuing to shrug off worries about the sturdiness of the U.S. economy. Key data also will come on the health of manufacturing and the services economy. The Federal Reserve may drop fresh clues as it approaches its next policy meeting.
1 All About Those Jobs (NFP)
The U.S. job market has been a standout performer for two years and counting. Hiring slowed a bit to start the year but the unemployment rate ticked down to 4.9%. Participation in the labor force continued to edge higher in January and wage growth showed fresh signs of firming. The Labour Department releases its February jobs report Friday afternoon, revealing if those trends continued to offer a strong counterpoint to worries about the economy’s overall health.
2 Manufacturing on the Mind
The economy’s sore spot in recent months has been the factory sector, raising fears of a full-blown recession. The Institute for Supply Management’s closely watched gauge of manufacturing activity for February is due out Tuesday. It has been in contraction territory for four straight months. In addition, the Commerce Department on Thursday releases data on factory orders during January. Early data on durable-goods orders were encouraging.
3 Services in Focus
Manufacturing only accounts for about 12% of U.S. economic output and the far-larger services sector has proven more resilient in recent months. Even so, the ISM’s nonmanufacturing gauge suggested activity decelerated in January and the Markit Economics flash services purchasing-managers index fell into contraction territory in February for the first time since October 2013. That puts an extra focus Thursday on the ISM services gauge for February.
4 Fed Files
The Federal Reserve’s March 15-16 policy meeting is fast approaching, and this is the last full week before officials go silent during their premeeting blackout period. Among others, New York Fed President William Dudley is speaking Tuesday in Hangzhou, China (late Monday night, U.S. time), and San Francisco Fed President John Williams, a closely watched centrist policy maker, speaks Wednesday in San Ramon, Calif. On Wednesday afternoon, the Fed will release its “beige book” roundup of anecdotal reports on economic conditions.
5 Homes of the Future
The outlook for the U.S. housing market is a bit uncertain at the moment. While sales of existing homes unexpectedly rose in January, sales of newly built homes fell and housing starts declined for a second month in a row. The National Association of Realtors on Monday will offer a glimpse into the future with its January pending home sales index, which tracks sales before they’re finalized. The gauge has been subdued in recent months.
Article: Wall Street Journal
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