Week Ahead: February Unemployment and Car Sales

Investors will be anxiously awaiting February employment numbers next week to see whether the long, slow economic recovery is gaining traction.

The February unemployment rate, set to be released next Friday, is expected to inch up to 9.1% from 9% in January, according to economists surveyed by Dow Jones Newswires.

Economists expect the U.S. employment rate to show that nonfarm payrolls increased by 192,000 new jobs in February, after a gain of 36,000 in January, a figure that fell far below Wall Street's expectations. Better labor markets bring more people into the labor markets looking for work, which is why the jobless rate is projected to rise slightly.

Auto makers on Tuesday are forecast to report a 20% increase in U.S. new-vehicle sales in February from a year ago, according to Edmunds.com. The car-shopping website predicted the top six major auto makers will all report higher sales, led by an expected 37% jump for General Motors Co. (NYSE:GM). February sales are expected to jump 29% for Toyota Motor Corp. (NYSE:TM), 27% for Nissan Motor Co. and 16% for Honda Motor Co. from year-ago levels.

U.S. retailers next week are broadly expected to report higher February sales from a year ago, led by a strong increase from discount companies, according to analysts polled by Thomson Reuters. It sees an increase of 3.1% for the month, on top of 4% growth a year ago.

The monthly sales results will lose a bit of their luster on Thursday, as a trio of teen retailers --Abercrombie & Fitch Co. (NYSE:ANF), Aeropostale Inc. (NYSE:ARO) and American Eagle Outfitters Inc. (NYSE:AEO) -- stopped reporting monthly sales data after January.

Brazil's Central Bank is expected to maintain a steady pace of interest rate hikes when it meets next week, with all 16 economists surveyed by Dow Jones saying they believe the central bank will raise rates by another 0.50 percentage point to 11.75%, following a similar half-point increase in January.

Brazil has joined a number of other emerging-market countries, including China and India, which have taken steps to rein in their soaring economies, which bounced back sharply from the world-wide economic crisis.

On Wednesday, Apple Inc. (NASDAQ:AAPL) will hold an event at which it is expected to unveil the second version of its iPad tablet, a device that would come as competitors bring out a host of touchscreen computers to challenge the market leader. The new iPad is expected to include an integrated camera, something the original didn't, and a zippier processor.

Agencies throughout the government are scrambling to figure out how to handle a government shutdown, with a potential closure as soon as March 5 prompting a review of which activities are essential and which aren't. If lawmakers don't approve a funding plan by next Friday, when a stopgap spending measure expires, many government options will have to stop.

Republicans, who control the House, have said they would introduce a short-term funding measure to keep operations going while negotiations continue on a longer-term budget.

The bankruptcy estate of General Motors will be in court in New York Thursday to seek approval of a liquidation plan that would tie up the loose ends left behind when the auto maker exited creditor protection in 2009. The liquidation plan for "Old GM," now known as Motors Liquidation Co., would resolve billions of dollars in debt stemming from old GM bonds and environmental cleanup costs, among other creditor claims.

House Republicans will push next week to end several Obama administration programs that aim to combat the foreclosure crisis. Republicans want to end the Obama administration's Home Affordable Modification Program, plus three smaller programs designed to refinance loans and provide relief to unemployed homeowners. The lawmakers plan to hold a hearing on the issue next Wednesday and a vote on Thursday.

The Senate Finance Committee next week will embark on what is likely to be an exhaustive review of the U.S. tax code, as it hears from a quartet of former Treasury tax officials. Sen. Max Baucus (D., Mont.), chairman of the Finance panel, plans to hold tax hearings throughout 2011, and aides say they could number as many as two dozen.

The International Securities Exchange next week will introduce a long-planned service for trading options contracts that has ignited controversy among rival options exchanges. The ISE, a unit of Deutsche Boerse AG, intends to introduce the function on Monday, after the Securities and Exchange Commission approved it Thursday.