Inflation is slowing toward pre-pandemic levels and the U.S. economy is still surprisingly strong. The stage is also set for the Federal Reserve to cut interest rates later in the year.
Don’t be surprised, then, by another stronger-than-expected employment report for January this week. The Fed’s latest meeting on Wednesday and the jobs report due next Friday, highlight a busy economic calendar.
FOMC
Wednesday, 2 p.m. Eastern
The Fed’s first policy meeting of the new year won’t result in an increase or decrease in interest rates, but the central bank and its chairman, Jerome Powell, are expected to offer clues on when the first cut in interest rates will take place this year.
Powell will also offer a survey of the economy. Right now, almost everything appears to be going as the Fed would like.
January employment report
Friday, 8:30 a.m. Eastern
The U.S. likely created 180,000 new jobs in the first month of the new year, economists polled by The Wall Street Journal estimate.
The economy gained a strong 216,000 jobs in January, the preliminary estimate showed.
The unemployment rate, meanwhile, is expected to inch up to 3.8% from 3.7%. The jobless rate sits near the lowest level in more than 50 years, however.
There’s plenty of reason to think job growth could be strong again. Layoffs were extremely low in January, suggesting that employers cut fewer jobs in the month than they usually do.
Consumers have kept spending at high levels, what’s more, so there’s still a need for some companies to hire.
The Federal Reserve would prefer too see hiring slow a lot further to the 100,000 a month range to loosen up a tight labor market.
U.S job openings
Tuesday, 10 a.m. Eastern
The number of new jobs listed has dropped by about one-fourth to 8.8 million from a record 12 million a few years ago.
That’s music to the ears of Federal Reserve officials, who view job openings a good way to gauge the demand for labor. Less demand for labor, the thinking goes, means less upward pressure on wages and thus lower inflation.
Job openings are forecast to decline again in December.
U.S. productivity
Thursday, 2 p.m. Eastern
How can an economy grow rapidly without stoking inflation? Higher productivity.
Which means workers are producing more goods and services in the same amount of time than they did, say, a year before.
Rising productivity is the key to a higher standard of living. There’s some reason to believe that an increase in the use of technology since the pandemic is boosting productivity, and that would be a great thing for the U.S. economy.
Productivity is forecast to increase 2.1% in the fourth quarter after a 5.2% surge in the third quarter.
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