It’s back to the future, for yet another month this week with the US jobs report out on Friday night. Economists think it will be another solid month.
On top of that, there’s the usual start of month surveys of manufacturing and service sector activity – those from Asia yesterday were mixed – Japan weaker than expected, South Korea a bit better, but the first of two Chinese surveys showed a sharp slowing.
In Australia, the Reserve Bank will keep rates on hold for yet another month at its October policy meeting today.
In Asia, China celebrates its Golden Week holidays for much of the week, so markets will be closed or running on low volumes.
The September labour market data is expected to show another strong 190,000 gain in jobs and unemployment falling to 3.8%.
But the AMP’s chief economist, Dr. Shane Oliver reckons wages growth would slip back to 2.8% year on year, (but still maintaining a gradual rising trend).
As the Fed showed last week in its commentary on the economy, it is still not yet worried about the intersection of wages and inflation – rising oil and petrol prices seem to be a more immediate concern in the US (and ere in Australia as well).
Figures out Friday showed the Fed’s preferred inflation measure, – so-called core PCE (Personal Consumption Expenditure) price index was in August’s which left the year-on-year increase at 2.0%.
That’s the Fed’s target inflation rate and its been at that 2% level now since March (having hit the rate for the first time in that month since 2012).
Fed members get the chance to make that point again with several speaking appearances – mostly notably two from Fed chair, Jay Powell.
The August jobs report was very solid and while there could be some give back (a weaker than expected outcome after such a solid rise), the underlying trend will be more of the same for the great American jobs engine.
In other US data there’s the September surveys of US manufacturing index and non-manufacturing activity, plus the trade deficit on Friday for August. Which is expected to worsen and could fuel some of Donald Trump’s ire on trade.
A potentially explosive annual conference of Britain’s ruling Conservative Party will be held this week with the Brexit deal the major point of contention and threat to Prime Minister May and the government.
Elsewhere the Eurozone unemployment rate for September was out on Monday, as was the Japanese September quarter Tankan business conditions survey from the Bank of Japan.
Besides the RBA meeting today, there’s the usual start of month data for Australia on retail sales (a small rise of 0.2% if forecast), the trade surplus to fall slightly to around $US1.4 billion and a small rise in building approvals (perhaps 2%) after the recent weak reports.
Late today the September house price data from CoreLogic will also be released, while September car industry sales figures are due later this week.
