The key economic data releases 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. There are a few speaking engagements from Fed ofﬁcials this week.
Monday, January 3
- 09:45 AM Markit manufacturing PMI, December ﬁnal (consensus 57.7, last 57.8)
- 10:00 AM Construction spending, November (GS +0.5%, consensus +0.7%, last +0.2%): We estimate a 0.5% increase in construction spending in December.
Tuesday, January 4
- 10:00 AM ISM manufacturing index, December (GS 60.0, consensus 60.2, last 61.1): We estimate that the ISM manufacturing index declined 1.1pt to 60.0 in December, reﬂecting the pullback in other business surveys and a drag from seasonality.
- 10:00 AM JOLTS job openings, November (last 11,033k)
- 5:00 PM Wards total vehicle sales, December (GS 12.5m, consensus 13.1m, last 12.86m)
Wednesday, January 5
- 08:15 AM ADP employment report, December (GS +400k, consensus +360k, last +534k): We expect a 400k rise in ADP payroll employment for the month of December. Our forecast assumes ﬁrm underlying job gains and a boost from lower jobless claims but a drag from prior-month payrolls in the ADP model.
- 09:45 AM Markit US services PMI, December ﬁnal (consensus 57.5, last 57.5)
- 02:00 PM Minutes from the December 14-15 FOMC meeting: The FOMC revised its statement at the December meeting to drop its previous intention to maintain an accommodative policy stance in order to keep inﬂation above 2 percent for some time, and Chair Powell’s hawkish tone at the press-conference suggested that he might conclude that the maximum employment requirement for liftoff has been met even earlier than previously expected. We continue to expect three rate hikes in 2022, and that balance sheet runoff will begin in 2022Q4.
Thursday, January 6
- 08:30 AM Initial jobless claims, week ended January 1 (GS 180k, consensus 199k, last 198k): Continuing jobless claims, week ended December 25 (consensus 1,715k, last 1,716k); We estimate initial jobless claims declined to 180k in the week ended January 1.
- 08:30 AM Trade balance, November (GS -$77.5bn, consensus -$74.7bn, last -$67.1bn)" We estimate that the trade deﬁcit increased by $10.4bn to $77.5bn in November, reﬂecting an increase in imports and a decrease in exports in the advanced goods report.
- 10:00 AM Factory orders, November (GS +1.6%, consensus +1.5%, last +1.0%); Durable goods orders, November ﬁnal (last +2.5%)
We estimate that factory orders increased 1.6% in November following a +1.0% increase in October. Durable goods orders increased 2.5% in the November advance report, but core capital goods orders declined by 0.1%.
- Durable goods orders ex-transportation, November ﬁnal (last +0.8%); Core capital goods orders, November ﬁnal (last -0.1%); Core capital goods shipments, November ﬁnal (last +0.3%):
- 10:00 AM ISM services index, December (GS 66.0, consensus 67.0, last 69.1): We estimate that the ISM services index retrenched 3.1 points to 66.0 in December after surging to an all-time high in November. Our services tracker fell 0.5pt to 59.0, and we also expect a drag from Omicron on survey responses.
- 01:15 PM St. Louis Fed President Bullard (FOMC voter) speaks: St. Louis Fed President James Bullard will discuss the U.S. economy and monetary policy during a virtual event hosted by the CFA Society St. Louis. Prepared text and Q&A are expected.
Friday, January 7
- 8:30 AM Nonfarm payroll employment, December (GS +450k, consensus +400k, last +210k); Private payroll employment, December (GS +425k, consensus +370k, last +235k); Average hourly earnings (mom), December (GS +0.4%, consensus +0.4%, last +0.3%); Average hourly earnings (yoy), December (GS +4.2%, consensus +4.2%, last +4.8%) ;Unemployment rate, December (GS 4.1%, consensus 4.1%, last 4.2%)
- We estimate nonfarm payrolls rose 450k in December (mom sa). We believe the pre-Omicron payroll trend was much ﬁrmer than the 210k pace reported for November—perhaps as high as +600k—and we note that most of the virus-related slowdown in dining activity occurred after the December survey week. Big Data labor market indicators were generally ﬁrm in the month, and the number of year-end layoffs was well below normal. This report also reﬂects the third month of hiring following the expiration of federal enhanced unemployment beneﬁts. By industry, we look for a weather-related boost in the construction industry and a ~50k rebound in education employment (public and private)—the latter reﬂecting fewer janitors and support staff departing for the holidays. However, we expect another modest decline in retail jobs due to labor supply constraints, and we are assuming only a modest pickup in leisure-sector job growth. Finally, we believe upward revisions to prior-month payrolls are fairly likely.
- We estimate a one-tenth drop in the unemployment rate to 4.1%, reﬂecting a ﬁrm household employment gain and a stable or higher labor force participation rate—the latter driven by expiring UI beneﬁts. We estimate a 0.4% rise in average hourly earnings (mom sa) that lowers the year-on-year rate by six tenths to 4.2%, reﬂecting mixed calendar effects and a waning boost from low-end wage pressures.
- 10:00 AM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will take part in a virtual panel on U.S. monetary policy at the annual meeting of the AEA.
- 12:15 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will chair a virtual panel discussion on black entrepreneurs and ﬁnancial constraints at the annual AEA conference.