Markets went back and forth between minor gains and losses during the early part of last week, while waiting anxiously for important economic data to be published. On Thursday, the release of the Federal Reserve’s preferred inflation gauge, Core CPI, was in line with expectations. Meanwhile, consumer sentiment unexpectedly fell, and manufacturing activity slowed further, supporting those anticipating a June rate cut. That sparked a rally at the end of the week, which propelled all major indexes towards strong February gains, and allowed Nasdaq Composite (NDAQ) to break its November 2021 record.
This week, investors will be focusing on job market reports, as well as on Federal Reserve Chair Powell’s testimony before Congress. Markets will be closely watching Powell’s testimony to see if it offers any insight into the outlook for the central bank’s monetary policy.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» February’s ISM Services PMI – Tuesday, 3/05 – This report shows business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» February’s Nonfarm Payrolls and Unemployment Rate – Friday, 03/08 – The Nonfarm Payrolls and Unemployment reports present the number of new jobs created during the previous month, along with the percentage of people that were actively seeking employment in the previous month. These reports are considered two of the more important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the health of the economy as a whole. One of the mandates of the Federal Reserve is full employment, and it takes labor market changes into account when determining its policy decisions.
» February’s Average Hourly Earnings – Friday, 03/08 – This data point serves as an important forward-looking indicator for overall price pressures stemming from wage inflation. The Federal Reserve pays close attention to labor costs and tightness of the job market, as they are connected to its dual mandate, price and labor-market stability.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
