November US Jobs Report, ECB December Meeting: Economic Events For Dec. 4-7

The sustained spike in initial jobless claims in the first three weeks of November, which isn’t that much smaller than the spike after Katrina, suggests there will be some lingering effect.

Economists expect nonfarm payrolls to increase by just 93,000 in November, much less than October’s 171,000 gain. Uncertainty surrounding the fiscal cliff negotiations might have held back employment growth as well.

Manufacturing jobs likely declined by 5,000 last month, after expanding by 13,000 in October. The ISM manufacturing index came in below the 50 breakeven level at 49.5 in November -- the lowest level since July 2009 and is down from October's level of 51.7. Since the June report, the ISM manufacturing index has been below the 50 breakeven level four out of six times, suggesting that the manufacturing sector is just treading water.

The unemployment rate is expected to hold steady at 7.9 percent in November.

In Europe, the main event this week should be the European Central Bank’s meeting and press conference on Thursday. President Mario Draghi is likely to state again that the ECB is ready to put its bond purchase plan into action. But he will stress that it is up to euro zone governments to address the debt crisis and he is unlikely to offer much hope of further imminent policy support for the broader economy.

Only a handful of the 71 economists polled by Reuters said the ECB would cut rates this time and they were split down the middle over the possibility of a rate cut early next year.

Otherwise, German industrial data for October are likely to show that the sector started fourth quarter on a very weak note. Meanwhile, the euro zone GDP breakdown will probably show that third quarter’s 0.1 percent contraction mainly reflected weak domestic spending.

Elsewhere, the central banks of Brazil and Colombia will release their meeting minutes. Investors will also receive November inflation data across Latin America.

Below are entries on the economic calendar between Dec. 4 and Dec. 7. All listed times are EST.

Tuesday

10:45 a.m. -- Federal Reserve Board Governor Daniel Tarullo (FOMC voter) speaks on "Industry Structure and Systemic Risk Regulation" before the Brookings Institution "Structuring the Financial Industry to Enhance Economic Growth and Stability" conference in Washington, D.C.

Non-U.S.:

E27 -- The Economic and Financial Affairs Council (ECOFIN) meeting in Brussels.

Australia – December RBA cash rate.

Canada – December interest rate announcement.

E17 – October PPI.

Wednesday

7:00 a.m. -- The Mortgage Bankers Association's (MBA) Mortgage Index for the week ending Nov. 30.

8:15 a.m. – Payroll giant ADP recently expanded and changed the formulation of its monthly employment data after several months of questions about the figure's accuracy. While economists say they are looking for the ADP print to come in at 125,000 for November, after an October print of 158,000, they also point to the limitation in their forecast given the limited history of forecasting to judge the accuracy of the revamped ADP Employment Report.

8:30 a.m. – In line with the upward revision to Q3 GDP growth (to 2.7 percent from 2 percent), economists expect productivity growth to be revised up to 2.7 percent from 1.9 percent. The flip side of this is likely to be a downward revision to unit labor cost growth to a decline of 0.9 percent, from a drop of 0.1 percent.

10:00 a.m. – Economists expect factory orders to remain flat in October, after gaining 4.8 percent in September.

10:00 a.m. – The upward trend in the ISM non-manufacturing index over the past few months may have been brought to a halt in November if the fiscal cliff has prompted businesses to postpone orders and to put off investment decisions. Economists think the ISM Non-Manufacturing Index will likely slip a bit in its November reading, from 54.2 to about 53.5.

Non-U.S.:

Ireland -- Government presents the Budget for 2013.

E17 – European Commission adopts a package of proposals against tax evasion and aggressive tax planning.

Poland – December repo rate.

U.K. – Autumn statement.

E17 -- European Central Bank (ECB) Executive Board member Joerg Asmussen speaks in panel discussion at Commerzbank AG event in Brussels.

New Zealand -- December RBNZ official cash rate.

E17 – November composite PMI index, final reading.

E17 – November services PMI index, final reading.

U.K. – November services PMI index.

E17 – October retail sales.

Chile – October economic activity index.

Thursday

7:30 a.m. – November Challenger layoffs report.

8:30 a.m. – Initial jobless claims should continue to recover from Superstorm Sandy-related trauma, dropping to about 380,000 in the week ended Dec. 1, from 393,000 in the prior week.

Non-U.S.:

E17 – December ECB interest rate announcement and press conference.

E17 -- ECB Executive board member Joerg Asmussen speaks at FORUM institute for management GmbH in Frankfurt.

Egypt – December deposit rate.

Serbia – December repo rate.

U.K. – December Bank of England rate decision and asset purchase decision.

Peru – December reference rate.

E17 – Q3 GDP, final reading.

Friday

8:30 a.m. – The lingering effects of Superstorm Sandy mean that nonfarm payrolls probably rose in net terms by just 93,000 in November, much less than October’s 171,000 gain. Initial claims readings have shown sizable storm effects into the BLS employment report's survey week, though loss of work should be offset somewhat by reconstruction efforts. The fiscal cliff could have prompted some businesses to hold off hiring until the New Year too.  The unemployment rate is expected to hold steady at 7.9 percent in November. Average hourly earnings should be a little better, up 0.2 percent after last month's one-cent retreat, bringing the yearly growth rate back up from 1.6 percent (a low for this business cycle) to 1.7 percent. The work week will likely hold at 34.4 hours, a bit below the pre-recession norm.

9:55 a.m. – After declining in late November to a level of 82.7, consensus expects the University of Michigan measure of consumer confidence to decline further in early December to 82.4.

3:00 p.m. – Economists’ expectation is that consumer credit rose $10 billion in October, down from the $18.4 billion and $11.4 billion gains seen in August and September respectively. Some impact from Sandy and lower auto sales look set to have squeezed non-revolving credit, while revolving credit likely remained flat.

Non-U.S.:

Russia – December overnight deposit rate and repo rate.

E17 -- ECB President Mario Draghi and Hungary Central Bank Governor András Simor speak at Budapest conference.

U.K. – October industrial output.

U.K. – October manufacturing output.

Germany – October industrial production.

Sources: Central banks, European Commission, Reuters, Market News, Capital Economics, Barclays, Societe Generale