USD - Major events in the week ahead

Sunday, Dec 04 2016

Events that marked the week:

On Tuesday GDP and Consumer Confidence figures were released. Real gross domestic product increased at an annual rate of 3.2 percent in the third quarter of 2016, according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.9 percent. With the second estimate for the third quarter, the general picture of economic growth remains the same; the increase in personal consumption expenditures was larger than previously estimated.

The Conference Board Consumer Confidence Index, which had declined in October, increased significantly in November. The Index now stands at 107.1 (1985=100), up from 100.8 in October. The Present Situation Index increased from 123.1 to 130.3, while the Expectations Index improved from 86.0 last month to 91.7. “Consumer confidence improved in November after a moderate decline in October, and is once again at pre-recession levels,” said Lynn Franco, Director of Economic Indicators at The Conference Board.

Wednesday was marked by ADP job data. Private sector employment increased by 216,000 jobs from October to November according to the November ADP National Employment Report. “For the month of November 2016 we saw very strong job growth that has almost doubled in gains over October 2016,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This growth was seen in primarily consumer-driven industries like retail and, leisure and hospitality - across all company sizes. Overall, consumers are feeling confident and are driving the strong performance we currently see in the job market.”

On Thursday Unemployment Claims and ISM Manufacturing PMI data was released. In the week ending November 26, the advance figure for seasonally adjusted initial claims was 268,000, an increase of 17,000 from the previous week's unrevised level of 251,000. The 4-week moving average was 251,500, an increase of 500 from the previous week's unrevised average of 251,000. There were no special factors impacting this week's initial claims. This marks 91 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The November PMI registered 53.2 percent, an increase of 1.3 percentage points from the October reading of 51.9 percent. The New Orders Index registered 53 percent, an increase of 0.9 percentage point from the October reading of 52.1 percent. Comments from the panel cite increasing demand, some tightness in the labor market and plans to reduce inventory by the end of the year.

Focus of the Friday's sesssion was on NFP report. NFP report was published. U.S. hiring picked up in November and the unemployment rate tumbled to a nine-year low while wages unexpectedly declined, providing a mixed picture of progress in the labor market. The 178,000 gain followed a 142,000 rise in October that was less than previously estimated, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 180,000 advance. The jobless rate fell to 4.6 percent from 4.9 percent as people entered the labor force and found jobs, though the overall participation rate dropped for a second month.

This week markets will be looking at:

ISM Non-Manufacturing PMI (Monday 16:00)

Unemployment Claims (Thursday 14:30)

Prelim UoM Consumer Sentiment (Friday 16:00)

More in this category: « NFP report in line with market expectations Company Operating Profits rose less than expected »