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What will the US jobs data show?
Forecasts suggest that US hiring slowed in September, potentially influencing the Federal Reserve’s decision to maintain interest rates.
Economists expect the US labor department to report an additional 150,000 jobs in September, down from the 187,000 added in August. The unemployment rate is also expected to decrease from 3.8% to 3.7%.
This data is crucial for the Federal Reserve as it evaluates the current state of the US economy and determines its monetary policy. With the recent message from the central bank indicating that interest rates will remain “higher for longer,” investors are closely observing the possibilities of future rate cuts.
There is some uncertainty among analysts and economists regarding whether the Federal Reserve will raise rates again in the near future. A weaker jobs report may diminish the likelihood of another rate increase.
Kate Duguid
Will oil rise to $100 a barrel?
Crude oil prices reached a new 10-month high recently, approaching the $100 mark due to supply shortages and declining US inventories.
Brent crude, the global benchmark, exceeded $97 per barrel for the first time since November 2022. Similarly, West Texas Intermediate, the US equivalent, surpassed $95 per barrel. Despite a slight retreat afterward, both experienced weekly gains of approximately 2%.
Since June, oil prices have risen by over 30% following the extension of voluntary production and export cuts by Saudi Arabia and Russia until the year’s end.
The upward trend in oil prices continued this week after the Energy Information Administration reported a drop of 2.2 million barrels in US commercial crude oil inventories compared to the previous week. At the WTI delivery point, inventories fell to their lowest level in over a year.
Although there is a possibility of further oil price increases in the coming months, experts doubt the impact it will have on central banks’ plans to address interest rates and achieve a 2% inflation target.
“If oil prices remain between $95 and $100 dollars a barrel over the next couple of months, the risk is that headline inflation in the US goes back up,” stated Rupert Thompson, chief economist at Kingswood Group. However, he noted that central banks primarily focus on core inflation and remain data-dependent before making decisions on rate adjustments.
Daria Mosolova
Is the eurozone labor market holding up?
Investors will be closely monitoring several eurozone economic indicators next week in order to gauge underlying price pressures.
Despite rising prices and borrowing costs over the past two years, the eurozone labor market has shown resilience, a trend experts believe will continue in the coming months.
Economists polled by Reuters predict that the eurozone unemployment rate will remain at the record low of 6.4% set in July, based on the data to be released on Monday.
“The labor market remains resilient despite stagnating growth,” stated Sven Jari Stehn, economist at Goldman Sachs. He expects a slight decrease in the unemployment rate in the following months but emphasizes the divergent employment markets in countries like Spain and Germany.
Stehn’s unemployment rate predictions are slightly lower than those of the European Central Bank (ECB), which projects joblessness to settle at 6.7% from the next year onwards. Policymakers may view the strength of the labor market as a concern if it leads to increased wage pressure and greater persistence of inflation.
Meanwhile, Eurostat’s upcoming publication on Wednesday will reveal a sharp reduction in producer prices forecast for August. Analysts expect the eurozone producer price index to contract by 11.6% annually, further easing price pressures on businesses. This decline in producer prices has contributed to a significant drop in consumer price inflation, reaching 4.3% in September, the lowest figure since October 2021.
Additionally, Eurostat will publish eurozone retail sales data, which is expected to show a contraction of 0.3% between July and August. This shift may reflect a shift in consumer spending habits with a return to services purchases after an increase in spending on goods during the pandemic.
Valentina Romei
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