Key Events This Week: JOLTS And Jobs

While all eyes will be on geopolitical developments, whether in Venezuela or Iran, as speculation erupts that a Trump “intervention” here is next, or even Taiwan, there also are quite a few macro events this week, and the main highlight will be the US jobs report for December on Friday. That’s an important one because there’s been more weakness in the labor market over recent months, with the unemployment rate rising to a 4-year high of 4.6% in November. As DB’s Jim Reid writes this morning, the deterioration in the labor market is why the Fed has delivered 3 consecutive rate cuts since their September meeting, and futures are still pricing in a 53% chance of another cut by the March meeting. So investors still think a Q1 rate cut is in the balance, and Friday’s report will go some way to determining if that happens. In terms of what to expect, DB economists think that nonfarm payrolls will rise by +50k in December, with the unemployment rate declining a tenth to 4.5%.

Over in Europe, the main highlight will be the flash CPI prints for December, with Germany and France reporting on Tuesday, ahead of the Euro Area-wide print on Wednesday. This isn’t a print expected to have too many implications for near-term ECB policy, with markets expecting them to keep rates on hold for the rest of the year. However, headline inflation is expected to fall below the 2% target early this year, largely driven by energy base effects.

DB economists think that if the decline for headline inflation is large enough, that could spill over to weaken core and inflation expectations too, which would lower the bar for further policy easing.  So that’ll be a key theme for H1. In terms of this print for December though, our economists expect Euro Area headline inflation to fall back to +2.0% thanks to those falling energy prices, down from +2.1% in November. And for core CPI, they expect that to remain at +2.4%.

Courtesy of DB, here is a day-by-day calendar of events

Monday January 5

• Data: US December ISM index, total vehicle sales, China December services PMI, UK November net consumer credit, M4, Japan December monetary base

Tuesday January 6

• Data: UK December official reserves changes, new car registrations, Germany December CPI, France December CPI, Italy December services PMI
• Central banks: Fed’s Barkin speaks, ECB’s Villeroy and Cipollone speak

Wednesday January 7

• Data: US December ADP report, ISM services, November JOLTS report, October factory orders, China December foreign reserves, UK December construction PMI, Japan November labor cash earnings, Germany November retail sales, December construction PMI, unemployment claims rate, France December consumer confidence, Italy December CPI, Eurozone December CPI, Australia November CPI

Thursday January 8

• Data: US Q3 nonfarm productivity, unit labor costs, December NY Fed 1-yr inflation expectations, November consumer credit, October trade balance, wholesale trade sales, initial jobless claims, Japan December consumer confidence index, November household spending, Germany November factory orders, France November trade balance, current account balance, Italy November unemployment rate, Eurozone December economic confidence, November PPI, unemployment rate, Canada October international merchandise trade, Switzerland December CPI, Sweden December CPI
• Central banks: ECB November consumer expectations survey

Friday January 9

• Data: US December jobs report, January University of Michigan survey, October building permits, housing starts, China December CPI, PPI, Japan November leading index, November coincident index, Germany November industrial production, trade balance, France November consumer spending, industrial production, Italy November retail sales, Eurozone November retail sales, Canada December labour force survey, Norway December CPI
• Central banks: Fed’s Barkin speaks, ECB’s Lane speaks

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the November JOLTS job openings report on Wednesday and the December employment report on Friday. There are two speaking engagements by Richmond Fed President Barkin this week. 

Monday, January 5 

• 10:00 AM ISM manufacturing index, December (GS 48.0, consensus 48.4, last 48.2): We estimate that the ISM manufacturing index edged down by 0.2pt to 48.0 in December, reflecting the decline in our manufacturing survey tracker (-1.6pt to 49.9).
• 05:00 PM Lightweight motor vehicle sales, December (GS 15.8mn, consensus 15.6mn, last 15.6mn)

Tuesday, January 6 

• 08:00 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the economic outlook and monetary policy at the Economic Forecast 2026 conference held by the Raleigh Chamber of Commerce in Raleigh, North Carolina. Speech text is expected.
• 09:45 AM S&P Global Services PMI, December final (consensus 52.9, last 52.9)

Wednesday, January 7 

• 08:15 AM ADP employment change, December (GS +55k, consensus +48k, last -32k)
• 10:00 AM ISM services index, December (GS 52.0, consensus 52.3, last 52.6): We estimate that the ISM services index declined 0.6pt to 52.0 in December, reflecting sequential softening in our non-manufacturing survey tracker (-0.7pt to 52.2).
• 10:00 AM JOLTS job openings, November (GS 7,600k, consensus 7,715k, last 7,670k)
• 10:00 AM Factory orders, October (GS -1.4%, consensus -1.0%, last +0.2%); Durable goods orders, October final (GS -2.2%, consensus -2.2%, last -2.2%); Durable goods orders ex-transportation, October final (consensus +0.2%, last +0.2%); Core capital goods orders, October final (consensus +0.5%, last +0.5%); Core capital goods shipments, October final (last +0.7%)

Thursday, January 8 

• 08:30 AM Nonfarm productivity, Q3 preliminary (GS +4.3%, consensus +3.8%, last +3.3%); Unit labor costs, Q3 preliminary (GS -0.2%, consensus +0.5%, last +1.0%)
• 08:30 AM Initial jobless claims, week ended January 3 (GS 220k, consensus 220k, last 199k); Continuing jobless claims, week ended December 27 (last 1,866k)
• 08:30 AM Trade balance, October (GS -$52.0bn, consensus -$58.4bn, last -$52.8bn)  

Friday, January 9 

• 08:30 AM Nonfarm payroll employment, December (GS +70k, consensus +55k, last +64k); Private payroll employment, December (GS +75k, consensus +50k, last +69k); Average hourly earnings (MoM), December (GS +0.25%, consensus +0.3%, last +0.1%); Unemployment rate, December (GS 4.5%, consensus 4.5%, last 4.6%)
• We estimate nonfarm payrolls increased 70k in December. On the positive side, big data indicators indicated a moderate pace of private sector job growth. On the negative side, we expect a 5k decline in government payrolls—reflecting a 5k decline in federal government payrolls and unchanged state and local government payrolls—and sequentially slower construction employment growth after an outsized increase the prior month and unusually poor weather early in the survey period. We estimate that the unemployment rate edged down to 4.5% in December from 4.6% in November: the bar for rounding down to 4.5% is not high from an unrounded 4.56% in November, continuing claims have declined slightly, and the furloughed federal workers that likely contributed to the spike in workers on temporary layoff (+171k in November vs. September) and unemployed government workers (+193k, SA by GS) that explained most of the increase in overall unemployment in November would have returned to work. We estimate average hourly earnings rose 0.25% month-over-month in December, reflecting negative calendar effects.
• 08:30 AM Housing starts, October (GS +1.0%, consensus +1.4%, last -8.5% [August]); Housing starts, September (GS +0.3%) 
• 10:00 AM University of Michigan consumer sentiment, January preliminary (GS 54.1, consensus 53.4, last 52.9): University of Michigan 5-10-year inflation expectations, January preliminary (GS 3.3%, last 3.2%)
• 01:35 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the economic outlook at the Maryland Bankers Association First Friday Economic Outlook Forum in Baltimore, Maryland. Speech text is expected.

Source: DB, Goldman