By Noreen Burke
Investing.com – May Nonfarm Payrolls Report is the main event for the week ahead. Investors are watching to see if April’s unexpectedly weak employment report was just a one-off slip. In a week shortened by the Memorial Day Monday holidays, the strength of the recovery will be in the foreground, with updates on manufacturing and service activities, private sector attitudes and unemployment claims. Several Federal Reserve policy makers will also speak. Energy traders will be keeping an eye on Tuesday’s OPEC + meeting and the eurozone will release inflation data amid concerns about what rising price pressures could mean on expansionary monetary policy. Here’s what you need to know to start your week.
May’s job report may reflect April’s weakness
Friday’s May job report shows whether the unexpected weakness of the April job report was a one-off or the beginning of a more sustained slowdown in the labor market recovery.
The economy is likely to have added 650,000 new jobs in May.
Only 266,000 jobs were created in April, far fewer than expected. The economy still has more than 8 million jobs than it did before the pandemic.
Economists generally still expect strong employment growth in the months ahead as the economy re-opens.
US economist Gregory Daco, head of Oxford Economics, said he expected 500,000 to 750,000 new jobs to be added in May by then and “it could pick up”.
ISM PMIs, Fed spokesman
ISM manufacturing The data is scheduled to be released on Tuesday, followed by ISM services Dates on Thursday. Both metrics are expected to be strong, but highlight issues in the supply chain that lead to bottlenecks and higher prices.
The Fed’s beige book on the economy is out Wednesday, and several Fed officials are due to speak during the week, including Chairman Jerome Powell. The Fed chairman will take part in a panel on a climate conference on Friday, along with Kristalina Georgieva, head of the International Monetary Fund, and Christine Lagarde, president of the European Central Bank.
Other Fed speakers during the week include Randal Quarles, Fed Vice Chairman, Fed Governor Lael Brainard, Patrick Harker, Fed President of Philadelphia, Raphael Bostic, Fed President of Atlanta, Charles Evans and Robert Kaplan, President of the Dallas Fed.
Careful stock market
Stock market investors will be keeping a close eye on economic data and comments from Fed officials as the central bank may continue to withdraw its massive stimulus measures amid ongoing price pressures.
Inflation worries had lingered for several weeks and weighed on growth names, stalling tech-heavy Nasdaq, which saw its first monthly decline since October.
Volatility has risen despite the S&P 500 rising below its record high of May 7 to less than 1% and the index posting its lowest monthly gain in four years in May.
The US stock exchange is closed on Monday for Memorial Day holidays.
Eurozone inflation data
The Eurozone should publish what is being watched closely inflation Pay on Tuesday.
Inflation in the bloc is rapidly approaching the ECB’s 2% target, but like their counterparts at the U.S. Federal Reserve, officials argue that this is likely to be temporary.
Last week, ECB chief economist Philip Lane said there was “almost no correlation between price spikes as the world economy reopens and what goes into the inflation trend.”
He added that it will take years for markets to return to pre-crisis levels and that momentum is still needed to secure the recovery.
The ECB is expected to discuss the prospect of a slowdown in its bond purchases to reflect the rebounding rebound at their June meeting.
OPEC + meeting
The organization of petroleum exporting countries and allies, including Russia, a group known as OPEC +, is likely to stick to the existing pace at which oil supply constraints will be gradually eased in their upcoming move To meet on Tuesday in the hope of a strong recovery in demand.
Since OPEC + decided in April to cut the cuts by 2.1 million barrels a day, oil has extended its rally in 2021 and is currently up over 30%, nearing $ 70 a barrel.
Concerns about a possible increase in supply from Iran have limited oil profits.
Iran and the world powers are negotiating steps Tehran and Washington must take against sanctions and nuclear activities in order to return to full compliance with the 2015 Iranian nuclear pact.
If an agreement is reached, Iran could add up to 2 million barrels a day to global supplies.
-Reuter contributed to this report
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