US hiring growth due for snapback in November after storms and strike

By Molly Smith, Vince Golle and Craig Stirling

 

US hiring probably jumped in November after hurricanes and a major strike undercut job growth a month earlier, consistent with a labor market that’s healthy yet gradually cooling. 

Nonfarm payrolls probably advanced by 200,000 in November, according to a Bloomberg survey of economists. The data due Friday are also expected to show the unemployment rate held at 4.1%.

 

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

 

 

With the strike at Boeing Co. now settled and recovery efforts underway after hurricanes Helene and Milton slammed the US South, the November employment report should have fewer caveats than the prior month. However, a steady decline in open positions and moderating payrolls growth, along with recent layoffs at Boeing and planned job cuts at General Motors Co., suggest a broader softening.

 

State-level employment data showed October payroll declines were most pronounced in Florida and Washington state, reflecting the hurricanes and industrial action, respectively. But a total of 29 states shed jobs, among the highest monthly tallies since the pandemic.

 

What Bloomberg Economics Says: 

“November’s jobs report will likely be an improvement on October’s, but not the type of strong rebound one would expect if all of October’s weakness were due to temporary factors. The underlying pace of job growth is likely below what’s needed to stabilize the unemployment rate — which we still expect to hit 4.5% before year-end.” 

— Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins. 

The latest figures 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 service sectors, while the Fed issues 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 set to make appearances during the week include John Williams, Alberto Musalem, Adriana Kugler, Beth Hammack, Mary Daly, Austan Goolsbee and Michelle Bowman.

 

In Canada, November jobs figures will be the last key data point before a Dec. 11 rate decision. October’s report showed a small gain that fell below expectations, underscoring labor weakness. Meanwhile, the Canadian Association for Business Economics conference will bring together leading economists.

 

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

 

Asia 

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

 

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

 

Australia takes the spotlight on Tuesday with the release of current account data that may affect third-quarter gross domestic product statistics due a day later. 

 

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

 

Elsewhere, South Korea also gets GDP data and Japan sees several sets of third-quarter corporate figures, including key capital spending data that will give a steer as to how GDP data for the period may be revised.

 

Japan also publishes cash earnings and household spending data for October, with attention focused on whether a continuing slide in real wages will weigh on spending. 

 

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. 

 

Also releasing CPI reports are Thailand, Vietnam, Taiwan, the Philippines, Indonesia, Pakistan and Kazakhstan. 

 

Data on Sunday revealed that South Korea’s exports returned to growth in November on the back of continuing demand for semiconductors. Trade data are also due from Australia, Pakistan and Vietnam. 

 

Among central banks, the Reserve Bank of India is likely to stand pat on policy on Friday, while Bank of Japan board member Toyoaki Nakamura, a dove, gives a speech on Thursday.

 

Europe, Middle East, Africa 

Testimony by ECB President Christine Lagarde to the European Parliament may be a highlight. Wednesday’s appearance will allow her to have the final word before a blackout period kicks in ahead of the Dec. 12 rate decision, where a quarter-point cut is widely expected.

 

Questions she will face may touch on the path of inflation, which just jumped to a four-month high. 

 

 

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

 

Industrial production figures for France and Spain are due on Thursday, while Germany’s are scheduled for Friday. 

 

Meanwhile investors will be keeping a close eye on France, where disagreement over the budget could topple the government.

 

Outside the euro zone, some notable inflation numbers are on the calendar. Switzerland’s on Tuesday is seen accelerating slightly to 0.7%, while the Swedish gauge policymakers track is expected to have jumped to 1.9% when it comes out on Thursday.

 

In Turkey on Tuesday, the central bank will hope annual inflation slowed enough in November from the previous 48.6% reading to allow for a possible rate cut in late December, marking the start of an easing cycle. Investors will also closely watch the monthly gauge, which was 2.9% in October and is officials’ preferred measure.

 

The same day, South Africa will publish third-quarter GDP, the first indication of the impact a coalition government formed by the African National Congress in June is having on reversing years of stagnant growth. The central bank reckons the economy grew 0.5% in the quarter versus 0.4% in the prior three months.

 

Russia’s manufacturing PMI, due on Monday, will point to the health of that country’s war-focused economy.

 

A handful of rate decisions are scheduled around the region: 

 

Poland’s central bank will set borrowing costs on Wednesday, with no change expected. Governor Adam Glapinski briefs reporters the following day. 

Also on Wednesday, Namibia, whose currency is pegged to the rand and is experiencing a slowdown in inflation, is expected to follow South Africa and cut its rate by a quarter point. 

On Thursday, Botswana, with one of Africa’s lowest inflation rates at 1.6%, is set to keep borrowing costs steady on expectations that price pressures may drift higher as the economy recovers from a prolonged slump in diamond prices.

Latin America 

The spotlight will be on Brazil’s output report. Faster-than-expected GDP-proxy readings for July through September have prompted analysts to more than double their forecasts for third-quarter growth, to just under 4%.

 

 

Surveys of economists’ expectations are on tap from the central banks of Argentina, Brazil and Mexico, along with Citi’s bi-weekly readout of analysts covering Mexico.

 

Expectations for borrowing costs and inflation are melting up in Brazil, while the Citi survey 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 has October industrial production in the vicinity of a piping hot 6%, while the readings on three separate purchasing manager indexes have been humming along above 50 all year.

 

Chile’s September GDP-proxy reading hit a two-year low following August’s negative print, pointing to a weak start to the fourth quarter.

 

 

The week will more than probably end on a high note for two of the region’s big central banks: data out Friday are expected to show consumer prices cooled in both Chile and Colombia last month.

 

As to the latter, annual inflation has slowed in 17 of the last 19 months from a cycle peak of 13.34%