Will PCE and NFP Boost Chances of Slower Rate Cuts?

Wednesday, 30 October 2024, 14.15 – ADP Nonfarm Employment Change (Oct)

The U.S. private payrolls increased more than expected in September, boosted by hiring in the construction, leisure and hospitality industries, adding to the evidence of a stable labor market. Private payrolls increased by 143,000 jobs last month after rising by an upwardly revised 103,000 in August. The main driver behind this increase is likely the ongoing resilience of the U.S. economy, particularly in sectors such as healthcare and hospitality, which continue to recover from pandemic-related disruptions. Despite a more cautious labor market overall, there is still demand for workers in certain key industries such as construction, healthcare and hospitality. Current trend suggests the labor market will continue to show modest gains.

Wednesday, 30 October 2024, 14:30 – US GDP (QoQ) (Q3)

The U.S. GDP for Q2 2024, released on September 26, came in at 3.0%, aligning with market expectations and marking an improvement from the 1.6% growth in Q1. This increase was driven primarily by robust consumer spending, business investment, and inventory accumulation. Key sectors contributing to this growth included health care, transportation services, and durable goods like motor vehicles. The sustained strength in consumer spending and business investment could support continued GDP growth, though potential risks of current interest rates and global economic uncertainties could moderate the pace.

Thursday, 31 October 2024, 05:00 – BoJ Interest Rate Decision

In its September 2024 meeting, the Bank of Japan (BoJ) maintained its interest rate at 0.25%, following two rate hikes earlier in the year. The BoJ is cautious about further tightening due to global uncertainties, including U.S. economic conditions and Japan’s slow exports. Inflation in Japan remains within the 2.5% to 3.0% range, but the central bank is waiting to assess the full impact of previous rate hikes before making any further changes. The BoJ will likely continue a patient approach, focusing on wage growth and inflation stability in upcoming decisions.

Thursday, 31 October 2024, 14:30 – U.S Core PCE Price Index (YoY) (Sep)

The U.S Core PCE Price Index (YoY) for August 2024 came in at 2.7%, align with market expectations and slightly higher than the previous month’s reading of 2.6%. The reason behind this slight uptick in the Core PCE inflation rate could be attributed to resilient consumer demand in certain sectors, while the broader inflationary pressures have started to moderate. It reflects the balance the Fed faces between controlling inflation and not stifling economic growth. Given this context, future expectations might lean towards inflation stabilizing around this level or slightly declining, assuming the Fed maintains its current monetary policy stance without further rate hikes.

Friday, 1 November 2024, 14:30 – U.S Nonfarm Payrolls (Oct)

The latest U.S. Nonfarm Payrolls report, released for September 2024, showed an increase of 254,000 jobs, surpassing expectation of 147,000 and also previous figure of 159,000. Notable contributors to this job growth included the construction, retail, and healthcare sectors, although manufacturing experienced a slight decline. However, the upcoming report may indicate a slowdown in job creation, as rising geopolitical tensions and cautious business investment could affect hiring decisions across various industries. Investors will pay attention to the ADP report for early insights.