Achi news desk-
Wages in the world’s largest economy are set to increase by at least 200,000 for the fourth consecutive month, according to a Bloomberg survey of economists. Average hourly earnings are forecast to climb 4.1% from the same month last year, the smallest annual advance since mid-2021.
Robust hiring is keeping up demand and the economy is moving forward at the same time inflation is slowing, albeit unevenly. It also allows Federal Reserve policymakers to hold off on cutting interest rates while they wait for further reductions in price pressures.
Read more: Powell Says Latest Inflation Data ‘In Line with Expectations’
Fed Chairman Jerome Powell, on Wednesday, leads a large cast of Fed policymakers scheduled to speak this week. Others appearing include John Williams, Adriana Kugler, Mary Daly, Austan Goolsbee, Lorie Logan and Thomas Barkin.
An increase in labor supply helps limit wage pressures that would otherwise risk spilling over into a sustained rise in inflation.
Friday’s payrolls report is also expected to show the unemployment rate has fallen to 3.8%, slightly below a two-year high hit in February, suggesting the job market is losing some momentum.
What Bloomberg Economics says:
“The two major surveys used to create the jobs report appear to capture different aspects of the US economy. Spending on services by those benefiting from appreciation in asset prices—primarily boomers—has supported employment in leisure and hospitality and health care.
At the same time, less demand from the less affluent part of the population has translated into a slowdown in business sales, and less hiring or more redundancies in other sectors. We expect that dichotomy to appear again in the March report, sending mixed messages to policymakers.”
— Anna Wong, Stuart Paul, Eliza Winger and Estelle Ou, economists. For a full breakdown, click here
February job openings data on Tuesday will offer insight into labor demand. While economists predict a downturn, vacancies remain above their pre-pandemic level.
Other reports in the coming week include a pair of surveys of purchasing managers from manufacturers and service providers.
Turning north, surveys from the Bank of Canada will offer insight into inflation expectations ahead of its April 10 rate decision. Canadian jobs data will be released at the same time as US numbers, and trade data will also be released. publish
Elsewhere, Chinese purchasing managers’ surveys are scheduled and a host of key inflation numbers are due from the eurozone to Turkey to Colombia. Central banks from India to Chile will set interest rates.
Click here to see what happened last week, and below is our wrap of what’s going on in the global economy.
Asia
China’s PMIs, due on Sunday, will dominate the start of the week as policymakers, investors and analysts try to gauge the current strength of the world’s second-largest economy.
Activity in the factory sector is forecast to return to expansion for the first time since September, while growth in the services sector appears to be maintaining largely the same pace as in February.
Caixin’s manufacturing gauge is seen the following day showing a smaller expansion in its measure of more private sector-focused activity.
PMIs from economies across the Asia-Pacific region on the same day will give a sense of the regional growth outlook.
The Bank of Japan’s quarterly Tankan survey is likely to reflect a continued divergence in sentiment by industry. The gauge for major manufacturers is seen slipping for the first time in a year, while the reading for major non-manufacturing producers may soar to a 32-year high.
Smaller firms are likely to be pessimistic, an outcome that could jeopardize wage gains in SMEs needed to power the virtuous circle sought by the BOJ.
South Korea’s export growth is forecast to cool in March, while consumer inflation data out on Tuesday likely eased a tick there.
Price gains may accelerate moderately in Indonesia and the Philippines. Thailand’s price declines are expected to moderate.
The Reserve Bank of Australia releases the minutes of its March meeting on Tuesday, with two board members due to speak during the week. The Reserve Bank of India is expected to keep its key policy rates steady on Friday.
Europe, Middle East, Africa
After consumer price reports from France, Italy and Spain last week, and following a region-wide holiday on Monday, further puzzle pieces will emerge revealing the strength, or lack thereof, of eurozone pressure.
German inflation on Tuesday is forecast to weaken further towards the 2% target. The European Central Bank will reveal its survey of consumer expectations on the same day.
The euro zone inflation number will be published on Wednesday. Results forecast by economists at 2.5% – and 3% for the base gauge that strips out volatile energy and food items – may keep officials but leaning towards cutting rates in the coming months as they gauge how their policy restricts growth.
Governing Council members have until the end of Wednesday to share their views before a blackout period begins ahead of their decision on April 11. Further clues to their thinking may emerge the following day, when a report from their last meeting is published. .
On Thursday, Sweden’s Riksbank will release the minutes of its March decision, shedding light on a result that saw officials confirm plans to cut rates at some point in the second quarter.
Switzerland will release inflation numbers on Thursday. Although an acceleration is expected, if it comes in as predicted at 1.4% that would still be well below the ceiling targeted by the Swiss National Bank, which recently cut rates.
And in Turkey, where the central bank has been tightening aggressively, data on Wednesday may show another acceleration in consumer price growth towards 70%.
Several financial meetings take place this week in Europe and Africa:
Latin America
Chile on Monday posts February GDP proxy data, confirming the view that its economy is probably on the rebound.
The central bank on Tuesday is almost certain to cut borrowing costs for a sixth consecutive meeting, with early consensus predicting a cut of 75 basis points to 6.5%, although rising consumer prices and swings in inflation expectations could yield a smaller reduction . in play.
Brazil releases a host of data, including monthly trade, industrial production, current account, foreign direct investment and primary and nominal budget figures.
The highlight of the week in Mexico comes with the posting of minutes of Banxico’s decision on March 21 to cut the key rate to 11%. While the post-meeting communication leans hawkish, the minutes may push that tone up a notch or two.
Peru’s inflation data on Monday may show the annual print falling below 3%, enough to persuade the bank’s President Julio Velarde and colleagues to go back to cutting borrowing costs at their April 11 meeting.
Colombia’s central bank posts the minutes of its decision on March 22, when it doubled the pace of easing and lowered its rate to 12.25%.
With March consumer price data expected on Friday to show a 12th straight month of deflation, the odds are stacked in favor of another half-point move at BanRep’s April meeting.
–With assistance from Zoe Schneeweiss, Robert Jameson, Patrick Donahue, Brian Fowler, Laura Dhillon Kane and Molly Smith.
More stories like this are available on bloomberg.com
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Published: 31 Mar 2024, 01:55 AM IST
