Investing.com — A slew of data released this week is expected to strengthen hopes for a so-called “soft landing” for the U.S. economy, according to Bank of America analysts.
Highlighting this week’s economic calendar is the latest U.S. nonfarm payrolls report, which may provide a glimpse into the health of the labor market.
BofA analysts said in a note to clients on Sunday that the numbers could “further fuel” a scenario in which the Fed is on track to curb inflation without triggering a broader downturn in the labor market or the broader economy. He said he expected there to be. This is known as a “soft landing.”
Economists expect the U.S. economy to add 144,000 jobs in September, up slightly from 142,000 the previous month. Meanwhile, the unemployment rate is expected to be similar to August’s level of 4.2%.
August’s payrolls rose from a downwardly revised 89,000 and was lower than the expected 164,000, while the unemployment rate fell from 4.3%.
Overall, the numbers point to a downturn in labor demand, a trend that multiple Fed officials said was a key driver behind the decision to announce a deep 50 basis point rate cut earlier this month. Recently identified. The Fed had previously raised interest rates to the highest levels in more than 20 years to counter price pressures.
Ahead of Friday’s non-farm payrolls report, the market will also have an opportunity to analyze job openings and private sector payrolls.
Meanwhile, investors will also be scrutinizing the Institute for Supply Management’s September Manufacturing and Services Purchasing Managers Index for further signals on the strength of the U.S. economy.
BofA analysts expected the ISM survey to signal not only weakness in manufacturing but also “expansion in services.”
The ISM manufacturing PMI to be released on October 1st is expected to be 47.6, up from 47.2 in August, but remains below the 50 point mark that separates contraction from expansion. The non-manufacturing PMI on October 3 is expected to be 51.6, slightly up from 51.5 in the previous month.
“In short, this data supports the outlook for a soft landing,” BofA analysts said.
“Economic momentum is not collapsing, it is cooling.”
