Biden’s first US job report showing challenge ahead: Eco Week

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US President Joe Biden is about to get his first full look at the labor market he has inherited.

Economists expect the jobs report to show a stagnant and rising unemployment rate in January – which will hold 6.7% – according to a Bloomberg survey before Friday’s data. This is almost double the level before the pandemic took place early last year.

The monthly data is expected to show a slight increase in hiring, compared to a loss of 140,000 jobs in December. While the U.S. economy has shown strong momentum in areas such as housing and manufacturing over the past few months, the labor market has struggled to build momentum.

Last week, Federal Reserve Chairman Jerome Powell cited the millions of unemployed Americans as a sign that the economic recovery still has a long way to go.

What Bloomberg Economics says:

‘The divergent’ K ‘lane will be seen in the January report report in general, as sectors such as leisure, hospitality and restaurants / pubs are due to continuous, significant job losses. While the economic hardship of the uprooted workers should certainly not be left untouched, an important silver lining of the job report will be to decipher the extent to which some parts of the economy continue to recover. ”

–Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For full notice, click here

Biden has asked for an additional $ 1.9 billion in economic relief to help compensate for the pandemic. If approved by Congress, it will provide more supplementary unemployment benefits, assistance to state and local governments and additional direct payments to individuals.

This would increase the $ 900 billion package approved by lawmakers in December, giving employees and businesses some support. The ongoing threat of the virus and the turbulent rollout of vaccines are expected to outweigh the hiring, especially in service industries such as restaurants and hospitality.

The US Treasury will announce this week its latest borrowing needs and how it plans to finance them. And the week will also feature a spate of local Fed presidents talking about the job market and economy, including Raphael Bostic, Atlanta, Loretta Mester and James Bullard of St. Louis. Louis and Cleveland.

Elsewhere, PMIs in Asia provide the latest snapshot of the state of recovery, while gross domestic product in the euro area marks the beginning of a double recession. Central banks in the UK, India and Australia are among those meeting, and the report on jobs across Canada is also available.

Click here for what happened last week and below is our breakdown of what’s going on in the world economy.

Asia

Manufacture PMI reports from countries across Asia will show the state of recovery in a region recently strengthened by spills from China. An official measure of China the production output published on Sunday declined a second month in January, but remains comfortable in the expansion area.

India’s the budget will be announced on Monday, with a spending provision likely because the government is trying to find a way out of the slump caused by pandemic. The central bank meets Friday.

South Korea’s export data in January will reveal early on whether momentum is recovering world trade slowed at the beginning of the year as the closing activity limited in many large economies.

The Japanese Prime Minister, Yoshihide Suga, is likely to decide whether to extend the emergency. He will reflect on how much the current advice contains contaminants against the economic damage to continue longer. Household spending figures for December are likely to show that consumers have already slumped spending before the renewed emergency was declared.

It’s finally a busy week for the Reserve Bank of Australia’s Philip Lowe. He will announce a policy decision on Tuesday, deliver a speech on Wednesday and announce his quarterly statement on monetary policy on Friday before speaking to a parliamentary committee later in the day.

Europe, Middle East, Africa

As the Bank of England is expected to launch its current dose of monetary stimulus, attention will be drawn to the assessment of the latest closure of the economy and the viability of negative interest rates as a means of relief. The BOE is likely to endorse the measure, but indicates that it is not in a hurry to take borrowing costs below zero.

Central banks are also expected in Poland, the Czech Republic, Iceland, Ghana, Mauritius and Egypt. keep rates up this week.

As for the data, the GDP of the fourth quarter is from the eurozone will probably show that the economy has shrunk, however surprising resilience in Germany, Spain and France may mean that the region in general is not doing as badly as feared. Sweden, Latvia, Serbia and the Czech Republic also publish output data.

Russia is expected to report on Monday that its economy shrank by 3.8% in 2020, a less dramatic hit than was seen in many economies due to its relatively small service sector.

Latin America

Peru’s consumer price data for Monday in January should put the annual rate close to 2%. The central bank predicts that it will decline to 1.6% this year.

In 2020, Colombia beat Peru to place the lowest annual inflation rate among the larger economies. Data appearing on Friday will show a slight rise, but the headline will still remain well below target. Analysts expect Chile’s economic performance figures to turn negative in December as unequal recovery from the recession slows.

On Monday afternoon, Brazilian data for exports and imports are presented. Surprisingly, trade plays a relatively modest role in the largest economy in Latin America, which is one of the least open among the group of 20 peers. The central bank of Colombia on Monday released the minutes of its meeting on January 29, where policymakers set their key record-low 1.75%.

Take a look at Brazil’s report on industrial production, which on Tuesday shows a fourth monthly year-on-year increase for December. A decline in November indicates that the pace of recovery is slowing.

– With help from Malcolm Scott, Vince Golle, Benjamin Harvey, Robert Jameson and Alaa Shahine