As Fed´s Vice Chair Stanley Fischer pointed out, the August employment report headlines a busy economic calendar this week that could meaningfully impact financial market expectations about the near-term trajectory of monetary policy.
Regarding the employment report, consensus expect something between 160 thousand and 180 thousand nonfarm payroll gain on Friday, which is moderately below the three-month trailing average of 190 thousand. Wednesday’s ADP private employment report will influence market expectations going into Friday’s BLS report.
In addition to the employment data, there are several other noteworthy economic releases this week. On Monday personal income and consumption report should show slight improvement in the former due to strong job growth last month. However, the latter may slip given the soft July retail sales figures. Tuesday´s consumer confidence index may deteriorate modestly.
While the outlook for consumer spending is relatively robust, as Fed Vice Chair Fischer indicated in a press interview last Friday, business investment remains a significant concern.
Wednesday’s Chicago PMI and Thursday’s manufacturing ISM are expected to remain at subdued levels, pointing to little near-term improvement in capital spending. In turn, Thursday’s construction spending release could indicate further weakness in private nonresidential building.