US week ahead: NFP, Core PCE, ISM and PMI – Danske Bank

According to analysts from Danske Bank, the most important release is the jobs report for October on Friday, where they look for further signs that wage growth is accelerating.

Key Quotes:  

“In the US, the most important release is the job reports for October, which is due out on Friday. We estimate non-farm payrolls rose by 190,000, which is in line with the current trend. It seems the tighter labour market is beginning to put upward pressure on wage growth, and we expect it to increase gradually in coming months. In October, we expect that average hourly earnings rose +0.25% m/m, which would take the annual growth rate to 3.2% rounded up.”

“The coming week also brings PCE core inflation numbers for September on Friday. It is not as important as usual, as we have the print indirectly from the first Q3 GDP release today (although there could be revisions to previous months, which we do not know for sure). We think it comes out at 1.9% y/y, assuming no revisions for July and August.”

“On Thursday, ISM Manufacturing data is due out. In our view, ISM manufacturing has been too high compared to reality for the past couple of years and, therefore, we think Markit PMI is a better indicator for manufacturing. We expect it to come down eventually, but it has been surprisingly stubborn.”

“On Saturday, the Fed’s blackout period starts, which means that we will not get any more signals from the Fed until the next FOMC meeting.”