Get ready for the biggest job increase in the US in months: Eco, week ahead

Photographer: Luke Sharrett / Bloomberg

The US labor market shifted to a higher gear in March, as the country made progress in an effort to put the pandemic in the spotlight. rearview mirror.

Economists project that a government report will show the biggest job increase in months vaccinations increase and economic activity, including robust manufacturing, increases. The median estimate in a Bloomberg survey of economists is that the unemployment rate will drop to 6% as the non-farm payroll increases by 643,000.

Policy makers, including Federal Reserve President Jerome Powell, and Treasury Secretary Janet Yellen expressed confidence last week in the recovery path of the labor market.

While the central bank sees unemployment drop to 4.5% at the end of the year – a relatively modest forecast – Powell emphasized the “highly desirable outcome” of expanding labor force participation. In the meantime, Yellen said that supplemental unemployment benefits would probably not be needed later this year.

More than 2 million Americans are being vaccinated every day, and President Joe Biden said that states should do every adult eligible for an injection by May 1. At the same time, many states are easing restrictions on business and activities. More frequent data released last week also pointed to a recovering labor market, as claims for regular unemployment insurance fell to a pandemic level.

Other parts of the economy have already reached or even surpassed pre-pandemic levels. After a series of Positive regional manufacturing data, the Institute for Supply Management factory index, released on Thursday, will take a look at the state of the sector in March. In February, it reached the highest increase in three years.

What the Bloomberg economy says:

“Economic data has already started to shake vigorously ahead of relaxed social distance measures, wide-ranging vaccinations and the latest round of fiscal stimulus. From retail activity to industrial production, signs of a robust acceleration have been increasingly abundant in recent months. Even so, the March jobs report will mark a turning point, where the economy is clearly shifting to a much faster rate of growth – not seen in a generation. ”

–Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For a complete analysis, Click here

Biden will present on Wednesday his long-term economic program, called Build Back Better, covering investments in infrastructure and technology for a reformulation of the tax code to help deal with the increase in income inequality. Before Biden’s speech in Pittsburgh, his advisers prepared about $ 3 trillion in proposals, according to people familiar with the matter.

Elsewhere, efforts will be stepped up to displace a giant ship trapped in the Suez Canal that threatens obstruct supply chains, blocking a crucial commercial artery in the world economy. The World Trade Organization reveals new forecasts for global trade and central banks in Kenya, Angola and Chile set rates.

Click here to see what happened last week and, below, our summary of what’s to come in the global economy.

Asia

From China The March PMI reading on Wednesday is the biggest launch of the week in Asia, with economists expecting a resumption of activity after a downturn earlier in the year. Regional reports follow the next day.

The Bank of Japan will release on Monday a summary of the negotiations of its most important meeting in 4 ½ years. Comments will be examined closely to see what measures may still be subject to further changes and for more details on the reasons behind the changes.

February’s unemployment, production and retail sales data will show how hard the Japanese economy was under pressure at the height of its recent Emergency state. BOJ’s Tankan business survey is expected to indicate Thursday that major manufacturers are reaching a limit of optimism after the emergency was lifted and global trade rebounded.

South Korean export data for the entire month of March should give the most recent indication of how strong this recovery is.

Europe, Middle East, Africa

With continental Europe still struggling to put its vaccine program into operation and fighting new outbreaks of the coronavirus, inflation in the euro area and economic confidence data will show the state of recovery. Final PMI data is likely to confirm that German manufacturing has increased by a record pace in March.

In the United Kingdom, House price data and fourth quarter gross domestic product components are set to provide a snapshot of the economic recovery.

Kenya’s central bank is likely to maintain its basic interest rate unchanged for a seventh consecutive meeting on Monday, as the country reports increases in Covid-19 cases and inflation is at a 10-month high.

The Angolan central bank, which last changed interest rates in May 2019, should also continue, as it seeks to support the economy and moderate inflation by adjusting the amount of currency in circulation, rather than interest rates.

Russia, Botswana and Mauritius report fourth quarter GDP figures for the week.

Latin America

Brazil’s benchmark consumer price index is above target and the the central bank is trying to catch up. The figures published on Tuesday are likely to show the March reading of the country’s broadest measure of inflation, reaching an all-time high.

Notable climb

Brazil’s large meters, producers and wholesalers at levels last seen in 2003

Sources: Brazilian Institute of Geography and Statistics; Getulio Vargas Foundation.

Argentina’s economic activity in January is expected to show a ninth consecutive monthly gain. After 9.9% drop in GDP last year, the economy could expand up to 7% in 2021.

The Central Bank of Chile is in no hurry to squeeze, especially with Santiago, home to around 40% of the population, back to lockdown. Analysts expect the base rate to remain at a record low of 0.50% on Tuesday. By the end of the week, Chile’s unemployment rate probably approached single digits and economic activity may have registered an annual gain in January.

Expelled from work

Employment data for January in Brazil will likely appear to be part of a “K-shaped” recovery: gains in employment in the formal sector in contrast to an increase in general unemployment, with millions still out of the workforce.

For evidence that Brazil’s recovery is faltering, just look at the industrial production data for January published on Thursday. The monthly and annual figures should be positive, but only fair.

– With the help of Benjamin Harvey, Malcolm Scott and Chris Anstey