Key Events In The First Week Of 2024: Payrolls And ISM

The holidays are over and the grind is back. And with that, we look to the first economic data releases of the new year, which this week are the ISM manufacturing report on Tuesday and the employment situation report on Friday. The minutes from the December FOMC meeting will be released on Wednesday. Richmond Fed President Barkin will deliver speeches on the economic outlook on Wednesday and Friday, and Dallas Fed President Logan will speak at the annual meeting of the American Economic Association on Saturday.

Tuesday, January 2

• 09:45 AM S&P Global US manufacturing PMI, December final (consensus 48.4, last 48.2)

• 10:00 AM Construction spending, November (GS +1.1%, consensus +0.5%, last +0.6%): We estimate construction spending increased 1.1% in November.

Wednesday, January 3

• 08:30 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will speak about the economic outlook to the Raleigh Chamber of Commerce. Text and audience Q&A are expected. On December 19th, President Barkin noted that “if … inflation comes down nicely, of course we would respond appropriately,” suggesting the FOMC could lower interest rates in response to falling inflation. Still, President Barkin observed that he has “got a perspective that inflation is a little stubborner than the average person is in there.” Since President Barkin spoke, downward revisions lowered quarterly annualized core PCE inflation to just 2.0% in Q3, and the core PCE index increased by just 0.06% in November.

• 10:00 AM ISM manufacturing index, December (GS 46.9, consensus 47.2, last 46.7): We estimate the ISM manufacturing index rebounded by 0.2pt to 46.9 in December, reflecting the rebound in East Asian industrial activity but weakness in other business surveys. Our GS manufacturing tracker fell 0.9pt to 49.1.

• 10:00 AM JOLTS job openings, November (GS 8,850k, consensus 8,850k, last 8,733k): We estimate that JOLTS job openings edged up to 8,850k in November.

• 02:00 PM Minutes from the December 12-13 FOMC meeting: The FOMC delivered a dovish message at its December meeting, as the November inflation reports and back revisions suggested that inflation had declined faster in the second half of the year. In the December meeting minutes, we will look for indications of the Committee’s views on the pace of cuts next year, especially in light of Chair Powell’s comments that “there’s a general expectation that [rate cuts] will be a topic for [the FOMC], looking ahead,” and that “that’s really what happened in today’s meeting.”

• 05:00 PM Lightweight motor vehicle sales, December (GS 15.4mn, consensus 15.5mn, last 15.3mn)

Thursday, January 4

• 08:15 AM ADP employment change, December (GS +100k, consensus +115k, last +103k): We estimate a 100k rise in ADP payroll employment in December, reflecting lackluster hiring across Big Data employment indicators.

• 08:30 AM Initial jobless claims, ending in December 30 (GS 220k, last 215k): Continuing claims, ending in December 23 (GS 1,865k, last 1875k)

• 09:45 AM S&P Global US services PMI, December final (consensus 51.3, last 51.3)

Friday, January 5

• 08:30 AM Nonfarm payroll employment, December (GS +190k, consensus +170k, last +199k); Private payroll employment, December (GS +150k, consensus +130k, last +150k); Average hourly earnings (mom), December (GS +0.30%, consensus +0.3%, last +0.4%); Average hourly earnings (yoy), December (GS +3.90%, consensus +3.9%, last +4.0%); Unemployment rate, December (GS 3.7%, consensus 3.8%, last 3.7%); Labor force participation rate, December (GS 62.8%, consensus 62.8%, last 62.8%): We estimate nonfarm payrolls rose by 190k in December (mom sa), reflecting a boost from mild winter weather and a favorable swing in the December seasonal factors worth roughly +50k. While Big Data employment indicators indicate a lackluster pace of hiring, initial jobless claims fell further, consistent with fewer end-of-year layoffs. On the negative side, we assume another sizeable decline in retail payrolls, reflecting soft brick-and-mortar spending trends during the holiday season. We estimate that the unemployment rate was unchanged at 3.7%, reflecting flat-to-up household employment following its sharp jump in November. We assume labor force participation was unchanged at 62.8%. We estimate a 0.30% increase in average hourly earnings (mom sa) that lowers the year-on-year rate by one tenth to 3.9%, reflecting waning wage pressures but positive calendar effects (the latter worth 5-10bps).

• 10:00 AM ISM services index, December (GS 52.8, consensus 52.5, last 52.7): We estimate that the ISM services index edged up 0.1pt to 52.8 in December. Our nonmanufacturing tracker edged up 0.1pt to 52.9 in November, and we see seasonality as a positive factor this month.

• 10:00 AM Factory orders, November (GS +1.8%, consensus +2.2%, last -3.6%); Durable goods orders, November final (last +5.4%); Durable goods orders ex-transportation, November final (last +0.5%); Core capital goods orders, November final (last +0.8%); Core capital goods shipments, November final (last -0.1%): We estimate that factory orders increased 1.8% in November following a 3.6% decrease in October. Durable goods orders increased 5.4% in the November advance report and core capital goods orders increased 0.8%.

• 01:30 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Thomas Barkin will deliver a speech on the economic outlook at an event hosted by the Maryland Bankers Association. Text and audience Q&A are expected.

Saturday, January 6

• 11:15 AM Dallas Fed President Logan (FOMC voter) speaks: Dallas Fed President Lorie Logan will speak on a panel on market monitoring and the implementation of monetary policy at the annual meeting of the American Economic Association. Moderated Q&A is expected.

Source: Goldman