Will Jobs Week Provide Clarity for the Labor Market?

This week marks the last Jobs Week of 2024, and it carries significant importance for the Federal Reserve. Their decision regarding future monetary policy will rely substantially on the state of the U.S. labor market. Last month highlighted a notable discrepancy between the private sector payroll figures reported by ADP, showing an increase of 233,000 jobs, and the U.S. government's Employment Situation report, which only indicated an addition of 12,000 jobs. Observers will be keen to see if the upcoming revisions narrow this gap.

On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) report for October is anticipated to show an increase in job openings, rising to 7.6 million from 7.4 million in September. However, this number remains markedly lower than the peak of 12.2 million seen in 2022. The ADP report on Wednesday is expected to indicate a slowdown, forecasting new private-sector jobs to grow by 158,000. Meanwhile, Friday’s non-farm payrolls report is expected to show a rebound, with 200,000 new jobs added. If these predictions are realized, it may set the stage for the Fed's scheduled interest rate cut of 25 basis points on December 18th.

Changes at Intel: CEO Pat Gelsinger Steps Down

In notable corporate news, Intel announced that its CEO, Pat Gelsinger, has resigned effective immediately. This comes during a challenging period for Intel, which has faced stiff competition, particularly from companies like NVIDIA. Intel’s stock price rose by 5% in pre-market trading following the announcement. The company is now being led by interim co-CEOs, David Zisner and Michelle Johnston-Holthaus. This transition raises questions about whether Intel will carve out a new direction in the artificial intelligence sector.

Market Expectations Amid Economic Indicators

As the market opens today, important economic indicators are expected, including the final Manufacturing PMI from S&P and the ISM Manufacturing report for November. Analysts predict S&P's headline will align with last month's reading of 48.8, while the ISM is expected to rise slightly from 46.5 to 47.5. Both figures indicate a contraction since they fall below the 50 mark. Additionally, the Construction Spending report for October is forecasted to show a modest increase of 0.2%, which would mark the third consecutive month of positive growth after some volatility during the year.

As these data sets unfold, they may be impacted by upcoming changes in the presidential administration. Former President Donald Trump's second term may come with a different approach, diverging from the previous administration's strategies. With new appointments bringing in fresh perspectives, market participants are encouraged to remain cautious with their expectations for fiscal guidance.

Jobs, Labor, Market