The upcoming week holds significant implications for financial markets as investors seek clarity on the direction of the U.S. economy and the Federal Reserve’s monetary policy stance. With the conclusion of the longest government shutdown, delayed economic data—including the September employment report—will finally be released. Though outdated, this report offers insight into labor market dynamics, with expectations pointing to a 40,000 rise in private-sector jobs. Notably, furloughed federal workers who did not receive pay during the reference week are excluded from payroll figures, potentially affecting the accuracy of the count.
A series of public appearances by Fed officials will provide further clues about policy priorities. Vice Chair Philip Jefferson and Governor Christopher Waller will discuss the economic outlook and monetary strategy, while Governor Michael Barr addresses bank oversight. Additional commentary from Governor Stephen Miran on the central bank’s balance sheet and Governor Lisa Cook on financial stability will also be monitored. The release of October meeting minutes adds another layer of transparency into internal deliberations.
In the absence of comprehensive government data, corporate earnings serve as key proxies for broader economic health. Reports from Home Depot, Target, and Walmart will reflect consumer spending trends, while Nvidia’s results may indicate whether enthusiasm around artificial intelligence remains justified. Regional manufacturing surveys from the New York, Philadelphia, and Kansas City Feds aim to fill data gaps caused by the shutdown. Meanwhile, October existing home sales are expected to remain subdued, and the final University of Michigan consumer sentiment index is likely to confirm an earlier preliminary reading of 50.3, a level historically associated with economic pessimism—though the reliability of this metric has been questioned due to its persistent bearish bias.
— news from Yardeni QuickTakes
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ECONOMIC WEEK AHEAD: November 17-21
The week ahead is a pivotal one for market participants seeking some clarity on US growth and the likelihood of another Fed rate cut. Now that the longest-ever government shutdown is over, investors will finally get a look at the September employment report. While stale at this point, the report should provide some insight into labor market conditions. n nA flurry of public speaking events by Fed officials will reveal whether they ‘re more concerned about employment or inflation. They include: Vice Chair Philip Jefferson (Mon, Fri) and Governor Christopher Waller (Mon) discussing the economic outlook and monetary policy; Governor Michael Barr (Tue, Fri) on bank supervision; Governor Stephen Miran on the Fed’s balance sheet (Wed, Thu); and Governor Lisa Cook on financial stability (Thu). The minutes from the October Fed meeting (Wed) will also be closely scrutinized. n nIn the absence of most government data, economists will dissect corporate earnings, particularly those of companies seen as microcosms of their industries. Home Depot, Target, and Walmart will shed light on consumer spending. Nvidia will provide insights into whether the AI boom is rational. n nHere ‘s a look at data releases that might influence the odds of a Fed rate cut on December 10: n n(1) Employment. We expect a 40,000 increase in private industry payroll employment (Thu). Such a gain is consistent with the view that the “breakeven” for employment is now 30,000-50,000. The September jobs report is expected to omit the unemployment rate. n nDuring a government shutdown, many federal employees are furloughed without pay. Significantly, payroll employment counts only those who received pay during the survey reference week. Furloughed workers who did not receive pay are excluded from payroll employment for that month, even though they remain employed in a legal sense. n n(2) Fed business surveys. The week ahead will see the New York Fed (Mon), Philadelphia Fed (Thu), and Kansas City Fed (Thu) releasing regional business surveys that are helping to fill in some blanks in vital macroeconomic data left by the shutdown. n n(3) Existing home sales. October ‘s existing home sales (Thu) probably remained weak (chart). n n(4) Consumer sentiment. The final November reading from the University of Michigan Consumer Sentiment Index (Fri) should confirm the weak preliminary reading of 50.3 (chart). We don ‘t have much confidence in this consumer confidence measure. It has been too pessimistic for too long.