In a holiday-shortened week, investors will have to wait until Friday for the most significant economic data scheduled for release – the December jobs report.
Economists are predicting a slight increase in jobs created over November, primarily due to seasonal hiring related to the holidays. Nevertheless, the unemployment rate is expected to hold steady at about 8.6%, or even tick up a notch to 8.7%.
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More job opportunities means more people are re-entering the workforce, which accounts for the unemployment rate staying put or moving higher even as more jobs are created.
When the December unemployment rate fell unexpectedly to 8.6% from 9% a month earlier, much of the sharp falloff was attributed to the fact that tens of thousands of workers had simply given up looking for work.
According to Dow Jones Newswires, economists are expecting 155,000 new nonfarm jobs in the December report, the best figure since April.
A strong jobs report will be needed to give consumer sentiment a boost. Recent consumer sentiment data has shown consumers are still spending at recessionary levels. Consumer spending, which accounts for 70% of the U.S. economy, will have to pick up if the U.S. economic recovery is to gain traction heading into the new year.
ADP’s job survey, due Thursday, often provides a preview of the upcoming government report.
Also due next week is data related to demand for goods in the manufacturing and non-manufacturing sectors.
The ISM manufacturing purchasing managers index, due Tuesday, is expected to rise to 53.5 for December from 52.7 in November. The December non-manufacturing index, due Thursday, is expected to increase to 53 from 52 in November.
U.S. stock markets are closed on Monday for the New Year’s holiday.