In the United States, it’s likely that employers slowed down their hiring a bit this month, even though they had been adding more jobs than they have in a while. This slowdown is in line with the strong job market that’s driving our economy forward.
The government is expected to release data on Friday, which will likely indicate that the number of jobs in the country increased by around 190,000 in October. This is still a significant increase, continuing the trend of substantial job growth we’ve seen in the past three months.
Hourly wages are expected to increase at the slowest rate in over two years, mainly because more people are joining the workforce. This slower wage growth is one of the reasons why it’s predicted that the Federal Reserve won’t change interest rates during their two-day meeting this Wednesday.
The strong job market has played a key role in keeping consumers spending money and the economy growing, even as inflation pressures slowly decrease. The consistent hiring of workers is making economists more optimistic about the future, and the chances of a recession have gone down since June.
Economists will also keep an eye on a report about employment costs in the third quarter, coming out on Tuesday, to see if there are any signs of wages growing more slowly. Labor costs are the biggest expenses for employers, and if they rise too quickly, it could keep inflation high. The government’s latest productivity report will also show how well businesses are managing these increased costs.
We might see a sign of the job market getting a bit easier in a report coming next week. It’s expected that the number of job openings in September will decrease compared to the previous month and could reach levels similar to what we saw back in March 2021.
The upcoming week has a lot going on, including surveys in October to check in on how manufacturers and service providers are doing.
Over in Canada, we’ll get new information about the job market in October, which will tell us if things are getting easier or not. Also, the data on the country’s economy for August is likely to show limited growth, mainly because interest rate hikes are making it harder for households to spend money.
In other parts of the world, there’s a central bank decision in Japan that people are keeping a close eye on, as there’s a chance they might change their policies. Meanwhile, it’s expected that the UK and Norway will likely keep their interest rates the same. On the other hand, Brazil and the Czech Republic might reduce their rates. In the euro zone, data could reveal that economic growth is slowing down and inflation is not rising as quickly.
If you want to know what happened last week, you can click here, and below, we’ll give you a summary of what’s happening in the global economy in the coming days.
Asia
During a meeting of trade ministers from the Group of Seven (G7) in Osaka, Japan, over the weekend, there was criticism directed at some countries for taking advantage of the economic weaknesses of others to achieve their own policy goals. They didn’t point fingers at any specific country.
After the G7 discussions, the European Union’s Trade Commissioner, Valdis Dombrovskis, and Australia’s Trade Minister, Don Farrell, will have an important round of talks about free trade. Both sides have cautioned that if they can’t reach an agreement n
In the meantime, China is holding its first Xiangshan Forum since 2019.
A significant event this week is the Bank of Japan’s policy meeting, concluding on Tuesday. While most economists anticipate that there won’t be any changes, many are concerned about the possibility of a policy adjustment. This concern stems from the yen’s value being close to 150 against the dollar, long-term interest rates continuing to go up, and recent data indicating a surprising acceleration in inflation in Tokyo.
In the evening of that day, Japan will release information about its currency intervention activities for October, along with a bunch of other data in the morning. Additionally, Prime Minister Fumio Kishida will reveal the specifics of his new economic plan on Thursday.
On Monday, Deputy Governor T. Rabi Sankar of the Reserve Bank of India will deliver a speech, and the following day, Governor Shaktikanta Das is scheduled to speak.
Malaysia’s central bank will announce its interest rate decision on Thursday, and during the week, various countries in the region, including China, will share their PMI data.
In other parts of the world, countries like Vietnam, Thailand, South Korea, and Australia will be sharing their trade data throughout the week. This data will provide us with a current look at the global demand situation. Additionally, Indonesia and South Korea will also publish information about inflation figures.
Europe, Middle East, Africa
While everyone’s paying attention to the Fed’s decision, Europe is also watching three central bank meetings happening closer to home on Thursday.
The Bank of England is the main focus, and it’s expected to keep interest rates the same for the second meeting in a row. They’re leaving the option open for future rate hikes if necessary to control inflation. Investors will be closely examining how the nine-member Monetary Policy Committee voted, and there might be a few members who want to raise rates again.
In Norway, it’s expected that the officials led by central bank Governor Ida Wolden Bache will keep interest rates the same for the first time since January. However, they’re likely to confirm their plan for a final increase of a quarter-point in the key rate in December.
The Czech central bank has a tough decision to make, as there are still concerns about inflation. Most economists predict a quarter-point rate cut, while others think there will be no change.
Looking at the euro region, important data coming on Tuesday may indicate that the economy either didn’t grow or even shrank during the third quarter due to the combined impact of interest rate hikes.
Out of the 29 economists surveyed by Bloomberg, only four believe that the brief period of economic growth we saw in the three months through June carried on into the autumn.
Germany’s shrinking economy, with its GDP report coming on Monday, is expected to have a negative impact on the whole region. On the other hand, France and Italy, with reports due the next day, are anticipated to have achieved a small amount of growth.
On a positive note for the European Central Bank, the inflation data on the same day may reveal a significant slowdown. The overall price growth is expected to have decreased to 3.1%, which is much closer to the ECB’s 2% target than before.
There’s a changing of the guard happening in Rome and Frankfurt that might catch some attention. The current Governor of the Bank of Italy, Ignazio Visco, is retiring this week. He will be replaced by Fabio Panetta, an Executive Board member at the European Central Bank (ECB), and Panetta will be succeeded by Piero Cipollone, a senior official at the Italian central bank.
In Switzerland, the Swiss National Bank will announce its earnings for the first nine months of the year on Tuesday, and its president, Thomas Jordan, will give a speech two days later. Inflation data is also expected to be released on Thursday.
South African Finance Minister Enoch Godongwana will present the budget on Wednesday, and investors will be paying close attention to see how the government plans to stabilize its finances. This is crucial because there have been revenue shortfalls and increased spending, which have expanded the budget deficit and debt.
The day after that, a conference kicks off regarding the special trade benefits the US provides to Africa. There’s an expectation that they’ll extend the current agreement, which is set to expire in 2025.
In Egypt, on Thursday, investors will be keeping a close eye on whether the central bank decides to raise interest rates. This decision is in response to record-high inflation. It also has consequences for the Egyptian pound, which is struggling due to a severe shortage of foreign currency.
Latin America
In the most significant event in the region, the central bank of Brazil is focused on implementing a third consecutive interest rate reduction of 50 basis points. This will bring the Selic rate down to 12.25%.
While inflation expectations for 2023 have returned to the bank’s target range, they still remain higher than the actual target throughout the entire forecast period.
In September, three major Latin American countries are sharing their unemployment reports. In Brazil, the job market is very competitive, in Colombia, it’s becoming more competitive, and in Chile, there’s a bit more room for improvement.
Mexico is leading the way by reporting its economic output for the third quarter on Tuesday. Analysts are expecting a bit of a slowdown when compared to the numbers from the previous quarter, which were 0.8% for quarter-on-quarter growth and 3.6% for year-on-year growth during the three months through June.
Brazil’s manufacturing Purchasing Managers’ Index (PMI) for September suggests that the data on industrial production for the same month, reported this week, will likely show a decline. Inflation in Peru is expected to have slowed down for the ninth month in a row in September, landing just below 5%.
In Colombia, the rate at which inflation is slowing down is not as fast as desired, and people’s expectations for inflation remain high and resistant to change. As a result, it’s likely that the Banco de la República will decide to keep the key interest rate at 13.25% for the fourth consecutive meeting.
Many analysts anticipate that the central bank will soon start a gradual process of reversing the record tightening of monetary policy that took place between 2021 and 2023, and this process is expected to span over several years.
