(Bloomberg) — The striking United Auto Workers union’s return to vehicle assembly lines is expected to boost payrolls in November, reversing a recent trend slowing U.S. job growth. It shows.
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Government figures on Friday are expected to show payrolls in the world’s biggest economy rose by 180,000, up from 150,000 in October. Even with these results, average employment growth over the past three months is still expected to be about 100,000 fewer than the pace at the beginning of the year.
The unemployment rate is expected to remain at 3.9%, the highest level since early 2022. This is consistent with softer labor market conditions and more subdued wage growth, helping to ease inflation concerns and supporting the Federal Reserve’s assessment that it is done raising interest rates. Fee.
Average hourly wages are expected to rise 4% in November from a year ago, the slowest annual growth since mid-2021, according to employment data.
Bloomberg Economics says:
“November jobs report will send mixed signals regarding labor market conditions. Strong non-farm jobs report after UAW strike resolution, weaker with unemployment expected to rise to 4.0% This will be in contrast to the Household Survey. In our view, the economy is probably at a tipping point towards recession.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Wu, economists.Click here for complete analysis
Fed officials plan to institute a blackout period ahead of their last policy meeting of 2023, on Dec. 12-13. Federal Reserve Chairman Jerome Powell on Friday pushed back against growing expectations for a rate cut in the first half of 2024.
Read more: Powell brushes off expectations of rate cuts as Fed moves cautiously
Robust employment and wage growth have underpinned strong consumer spending in recent months. Although the current pace of job growth is consistent with further economic growth, a more widespread and severe employment slowdown would increase the risk of a recession.
Separate statistics show job openings are expected to be at their lowest level in three months, showing that demand for labor is gradually easing. Weekly jobless claims will also be closely monitored for signs of more layoffs.
The number of people enrolled in unemployment benefits is already at a two-year high, showing that unemployed Americans are finding it harder to secure another job.
What’s more, a majority of forecasters in a Bloomberg survey expect the Bank of Canada to keep interest rates unchanged at 5% for the third consecutive meeting on Wednesday. Canada’s economy unexpectedly contracted in the third quarter and consumer spending stalled, evidence that the central bank’s aggressive interest rate hikes are working to suppress growth.
Elsewhere, borrowing costs are expected to remain unchanged in India, Australia, Poland and across Africa. Beyond central banks, Chinese President Xi Jinping is hosting the European Union’s Ursula von der Leyen, whose finance chiefs are trying to agree on new fiscal rules.
Click here to find out what happened last week. Below is a summary of what will happen next in the global economy.
Asia
European Commission President von der Leyen will travel to China from Thursday for her first face-to-face talks with President Xi in four years, a meeting that signals Beijing aims to improve relations with its major trading partner. This could be a new sign of the future.
The Reserve Bank of Australia is expected to keep interest rates on hold on Tuesday, following last month’s hike. Economic growth figures will be released the next day.
South Korea will release revised gross domestic product (GDP) statistics on Tuesday, along with price statistics for November. Taiwan and Thailand will release their inflation reports on Wednesday and Thursday.
Investors will have more information on Japan’s inflation trends as Tokyo CPI is released on Tuesday and wages are released on Friday.
These figures, along with revised GDP figures, could influence the Bank of Japan’s policy as the central bank prepares for its next meeting later this month.
As the week draws to a close, the Reserve Bank of India is likely to hold out on Friday.
Europe, Middle East, Africa
The release of new data on Thursday comes after surprise data showing the French economy contracted in the third quarter while Italy posted some growth, revising the overall euro zone contraction for the same period. There is a possibility that
Meanwhile, industrial production data for October, the start of the final quarter of the year, will be released by all four of the region’s biggest economies, starting with France and Spain on Tuesday, followed by Germany and Italy on Thursday.
Wednesday’s factory orders in Germany may also be an indicator of whether the country’s manufacturing industry is out of the worst of the economic downturn.
European Central Bank officials are eyeing such data in gauging the impact of the last rate hike, as investors bet on lower borrowing costs as early as April after weaker-than-expected inflation data.
The agency’s Consumer Price Expectations Survey is scheduled for Tuesday, and this week’s statements, including Governor Christine Lagarde’s speech on Monday, will provide clues to the ECB’s intentions ahead of its Dec. 14 Governing Council meeting. will be scrutinized.
The blackout period before a decision begins on Thursday, the same day Lagarde attends a meeting of euro zone finance ministers who are at odds over how to apply the EU’s debt and deficit limits when they are reinstated in January.
Germany’s fiscal turmoil sparked by last month’s Constitutional Court ruling continues, with Finance Minister Christian Lindner scheduled to quit his job this weekend to plug a 17 billion euro ($18.5 billion) shortfall in the country’s 2024 budget. He said he plans to make cuts in areas such as benefits.
In the UK, the Bank of England will release its latest financial stability report on Wednesday at a press conference hosted by Governor Andrew Bailey. His agency plans to release the results of a survey it commissioned on consumers’ attitudes about inflation in two days.
Switzerland’s statistics authority will release the country’s consumer price statistics for November on Monday. Economists expect the figure to remain below the central bank’s 2% limit for the sixth consecutive month.
On the same day, Sweden’s National Bank published minutes of its latest decision, in which officials defied market expectations for a rate hike by leaving borrowing costs unchanged. Governor Eric Tedine and four lieutenant governors will give lectures every day.
Several central banks in the region are expected to keep borrowing costs unchanged.
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In Eastern Europe, interest rates in Poland are likely to remain at current levels for two months on Wednesday amid uncertainty over the incoming coalition government’s fiscal plans.
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The next day, Serbian authorities could continue to withhold borrowing costs.
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In Africa, Kenya’s inflation rate remains within target and is expected to remain unchanged at Tuesday’s meeting for the third consecutive session as policymakers monitor a sharp decline in the shilling.
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Neighboring Uganda is also likely to keep its borrowing costs unchanged on Wednesday after rising inflation and its currency fell to its lowest value against the dollar in more than a year.
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And in Botswana, policymakers are poised to keep key interest rates unchanged on Thursday.
Elsewhere, consumer price data will be in the spotlight. Inflation in Turkey is expected to accelerate slightly in November to about 62%, the country said on Monday. And consumer price growth is also likely to have picked up in Russia on Friday.
latin america
Brazil’s GDP figures to be released on Tuesday will be one of the week’s highlights showing how much Latin America’s largest economy slowed in the third quarter.
Brazil’s economy beat expectations in the first half of the year, but high interest rates have finally taken a toll and is expected to stall from July to September.
Brazil’s central bank has cut its benchmark interest rate by 150 basis points since August and has pledged to cut rates by at least 100 basis points at its next two policy meetings.
On Thursday, Mexico, Chile and Colombia are scheduled to release consumer price data for November. Inflation is expected to slow further in Chile, while in Mexico, although the composite index is rising, the pace of increase in core prices is expected to slow, making the situation more complex.
Central Bank of Mexico President Victoria Rodríguez Ceja said on Wednesday that a rate cut in early 2024 could be discussed, but other board members expressed doubts that it would happen so soon.
Meanwhile, Colombia’s annual inflation rate is expected to remain above 10% in November, although an unexpected contraction in the economy in the third quarter has prompted the central bank to begin unwinding its record monetary tightening cycle soon. There are growing expectations that the project will be launched.
–With assistance from Walter Brandimarte, Laura Dillon Cain, Monique Vanek, Paul Wallace, Yuko Takeo, Tony Halpin, and Piotr Skolimovsky.
(Latest information on Germany in EMEA section)
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