US Data Preview: Jobs Rpt, ISMs, Lots of FedSpeak

WASHINGTON (MaceNews) – The week ahead’s economic data is highlighted by Friday’s jobs report, telling us what we already know about March, that employment improved as rebound hiring kept climbing the long road back to full employment.

Monday’s appearance of Federal Reserve Chair Jay Powell is on the usually market insensitive subject of community development, yet perhaps will give him still one more opportunity to talk about the pandemic’s damage to low income earners which he keeps saying will take a very long time to heal. That homeless encampment two blocks from his office could get a still higher profile.

His Wednesday news conference replayed all of those expressions of caution and for those listening closely, even had a sentence fragment devoted to the danger of a virus resurgence next winter.

Friday’s March personal income report, with its 21% off-the-charts eruption of income, confirmed that the $384 billion in economic impact payments the U.S. Treasury has been spreading around the country since March 12 had to show up in the numbers. So much more has gone out in April. The seventh batch of payments launched this past week, dropping another $4.3 billion into the potential spending stream. So the surge that is washing through all the statistics has a lot more to run.

Yet the Dow industrials and the Nasdaq are ending in the red for the week with the S&P up just barely. Gold, silver and platinum had a negative week as well. For three months, though, the S&P is up more than 12%, about the same amount as earnings have exceeded expectations so far.

Longer-term Treasury yields, those above 5 years maturity, generally inched up a little in the past week, with the 10-year at 1.631% at week’s end, well below where expectations were headed at the peak of 1.745% a month ago – which was double what it was at the beginning of the year.

Hundreds of billions in Treasury checks, earnings estimates revised upwards, 100 million American adults past the 14-day wait after that final inoculation. Next Wednesday’s Treasury quarterly refinancing announcement will be on the low side of expectations of a few months ago. And it’s far too soon to know if Powell’s definition of “transitory” is right or wrong, with the first quarter PCE price index spiking right on schedule. Again, what’s not to like?

It’s beginning the season when Federal Open Market non-voters begin to stray off the reservation, talking about the attractiveness of tapering and outside voices become a little more shrill in their skepticism about the current inactive phase of monetary policy. Those murmers can and likely will be ignored for quite a while longer.

In the political sphere, Republican sniping seems to be missing the mark as President Biden’s approval ratings stay elevated. Momentum is building toward some sort of infrastructure rebuilding program and the public generally seems to see big spending plans far less outrageous than described in Capitol Hill opposition talking points.

Under the surface, there’s a great divergence in fundamental assumptions. Republicans concentrate on the border “crisis” although the total of those turned back across the border is not substantially different in number than in the Trump years. Children and teenagers who swamp detainment facilities still seem to be better off here than there and the length of time they are separated from relatives has shortened considerably.

Within the Biden administration the avalanche of spending is viewed through the lens of decades of what are seen as working class givebacks. Those who did not share in the ‘80s and ‘90s productivity gains, whose wages stayed stagnant while CEOs’ compensation proved to be boundless, who were redlined out of better neighborhoods and deprived of the capital formation that elevates future generations, they say, are due some payback at the expense of those at the top who have done so well.

And there’s that competition with China. White House aides have pointed out that the long-term struggle between democracy and autocracy is very much on the president’s mind. U.S. educational deficits, a mostly paralyzed Congress, and all the disadvantages of a largely demobilized national will are major parts of his largest challenge. He knows how sensitive his fellow citizens are to fears of losing what they feel is the American birthright of No. 1 status in the world, No matter that China’s brittle economy and social-governnment tensions, its demographic inevitabilities and all the other near-term dangers documented by writers inside the country loom large, or that the U.S. can do little to influence anything important. Bogeymen (or bogey persons?) have always been nearly indispensible for domestic focus.

Long ago, when Japan was seen as ascendant, economist Herb Stein – whose views were widely admired but seldom taken to heart – wrote several critiques of “No. 1-itis.” One of them, in the April 12, 1990, Wall Street Journal, opined, “We are too rich to go on measuring our national life in billions of dollars of GNP.” No one listened.

The upcoming week’s economic data points and the many Fedspeak instances are listed below:

UPCOMING ECONOMIC DATA AND FEDERAL RESERVE EVENTS

Monday, May 3 – 9:45a ET Markit manufacturing PMI

Monday, May 3 – 10a ET US ISM manufacturing PMI

Monday, May 3 – 10a US Census March construction spending

Monday, May 3 – 2:10p NYFed’s Williams speaks, Women in Hsing/Finance

Monday, May 3 – 2:20p Fed Chair Powell speaks re community development

Monday, May 3 – US Treasury quarterly borrowing estimate

Tuesday, May 4 – 8:55a Redbook US retail same-store sales

Tuesday, May 4 – US auto sales

Tuesday, May 4 – 10a US Census Bureau March factory orders; revised durables

Tuesday, May 4 – 1p MinnFed’s Kashkari/SanFran Fed’s Daly speak, ECOM

Wednesday, May 5 – 7a US MBA wkly mortgage applications

Wednesday. May 5 – 8:15a ADP/Moody’s Analytics March private payrolls

Wednesday, May 5 – 8:30a US Treasury quarterly refunding announcement

Wednesday, May 5 – 9:30a Chi Fed’s Evans speaks, Minsky Conf, Bard College

Wednesday, May 5 – 9:45a Markit April  US services PMI

Wednesday, May 5 – 10a US ISM services PMI

Wednesday, May 5 – 10::30a US EIA oil stocks

Wednesday, May 5 – 11a Boston Fed’s Rosengren speaks, Boston College

Wednesday, May 5 – 11a Cleveland Fed’s Mester speaks, Boston Economic Club

Wednesday, May 5 – 3p ChiFed’s Evans speaks at Chi Fed

Thursday, May 6  – 7;30a US Challenger April Layoffs

Thursday, May 6 – 8:30a DoL wkly initial benefit claims

Thursday, May 6 – 8:30a US 1Q Productivity

Thursday, May 6 – 9a NYFed’s Williams speaks, opening remarks, at NYFed

Thursday, May 6 – 1p AtlFed’s Bostic speaks, at AtlFed

Thursday, May 6 – CleveFed’s Mester speaks, for  UC-Santa Barbara

Thursday, May 6 – 6:05p DallasFed’s Kaplan speaks, at DallasFed

Friday, May 7 – 8:30a March US jobs report

Friday, May 7, 10a Apr wholesale Inventories

Friday, May 7 – 1p Baker-Hughes oil rig count

Friday, May 7 – 3p March Federal Reserve Consumer Credit

Separately, from Extract Analytics, a view of the coming week’s SPX:

Contact this reporter: denny@macenews.com.

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