Economy Week Ahead: China PMI, U.S. Private-Sector Hiring and September Employment

By Paul Kiernan and Liyan Qi 

The week ahead brings data from important business surveys, trade between the U.S. and the rest of the world and the all-important monthly employment report. Here is what to watch:

Monday: China will release its official purchasing managers index right before the weeklong National Day holiday. Economists expect the manufacturing PMI to inch up to 49.6 this month from 49.5 at the end of August. Massive monetary-policy easing probably isn't what China wants given its mounting debt problem, but the country's deepening economic slowdown does require Beijing to be proactive in its easing efforts, economists say.

Tuesday: The Institute for Supply Management publishes at 10 a.m. ET its monthly reading on U.S. manufacturing activity, which declined in August for the first time in three years. While that fueled worries that the global economic slowdown is weighing on the U.S., economists reckon the index returned to positive territory in September. The Wall Street Journal consensus forecast has the ISM manufacturing index rising to 50.2 in September from 49.1 in August. (A reading of 50 is the cutoff between expansion and contraction).

Wednesday: Automatic Data Processing, Inc., produces a sneak peek at U.S. private-sector hiring two days before the Labor Department's official jobs report. Economists expect the data to show 138,000 positions were filled in September, consistent with forecasts for another solid month for job growth.

Thursday: ISM releases its nonmanufacturing indicator at 10 a.m. ET, providing a window into U.S. services activity in September. Economists expect the index to remain solidly in expansion, though falling slightly to 55.2 from 56.4 in August. That would be good news at a time when a pre-eminent fear among economists is that factory weakness may spill over into the much larger services sector.

Investors will also be watching official data on August factory orders, which are due to publish at the same time and are expected to rise a modest 0.1% from July.

Friday: The U.S. Labor Department releases its September employment report, the most closely followed economic indicator of the month. With the China trade war and the slowdown in Europe weighing on exports, manufacturing and business investment, consumers have been the sturdiest pillar supporting economic growth in the U.S. this year. Economists are expecting a decent report: nonfarm payrolls up 140,000, the unemployment rate steady at 3.7%, and average hourly earnings up 3.3% from September 2018. Any sign of weakness could bode poorly for household spending, especially as consumers face the effects of higher tariffs on imported goods from China in coming months.

(END) Dow Jones Newswires

September 29, 2019 15:14 ET (19:14 GMT)

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