Employment Data; Holiday Sales Expected To Drive Market Sentiment

MIIRInvestors will receive more clues this week about the health of the economy in November with a wide range of economic data set to be released while Friday’s employment report for November is expected to fuel more speculation about the possibility the Federal Reserve will taper their quantitative easing program in December.

On Friday the U.S. Department of Labor will release the non-farm employment report for the month of November, marking the final non-farm payroll employment report before Fed  Committee members will convene for their December FOMC meeting on December 17-18th.

During the last Federal Reserve meeting at the end of October, the central bank decided to make no changes to their controversial $85 billion monthly quantitative easing program while citing underlying strength in the broader economy, causing investors to question whether the Fed may be signaling a December tapering to their closely watched quantitative easing program.

“Taking into account the extent of federal fiscal retrenchment over the past year, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy” the Fed wrote.

The Fed also sees the downside risks to the outlook for the economy and the labor market have diminished since last fall.

On November 8th, the October employment report showed that the U.S. economy added 204,000 non-farm payroll jobs, easily beating the consensus estimate of 120,000 jobs in October during a month that saw the unemployment rise to 7.3 percent from 7.2 percent when over four hundred thousand Federal government employees were furloughed for 16 days.

Meanwhile, the nonfarm payroll employment report for August was revised from 193,000 to 238,000 and September saw a revised increase from 148,000 to 163,000.

Job growth has averaged 190,000 per month over the past 12 months.

On November 20th the Commerce Department reported that retail sales in October increased more than expected, increasing 0.4 percent from the previous month, the largest increase in 3 months.

Holiday Sales Data

One of the shortest shopping seasons is already underway with fewer than 30 days between Thanksgiving and Christmas this year.

Retailers have begun offering earlier aggressive discounts to entice shoppers to open up their wallets.

Over the week-end, Shopper Trak, the leading provider of shopper analytics, reported that when compared to Thanksgiving and Black Friday last year, brick-and-mortar shopper traffic increased 2.8 percent while retail sales increased by 2.3 percent.

Since more stores are opening on Thanksgiving Day this year instead of Black Friday, brick-and-mortar shopper traffic actually dropped 11.4 percent on Black Friday and retail sales decreased by 13.2 percent when compared to Black Friday last year.

On Tuesday, Dec. 3rd, Shopper Trak will present the sales and traffic statistics from Nov. 28 through Sunday, Dec. 1st.

The National Retail Federation reported on Sunday that more than 141 million shoppers have already or will have shopped by the end of the long Thanksgiving weekend, up from 139 million over the same period last year.

But aggressive discounting is impacting margins and the National Retail Federation estimates the average shopper spent $407.02 over the weekend, down from $423.55 last year.

“Retailers’ late night and early morning promotions struck just the right chord for those hoping to kick off the holiday shopping season with friends and family. With only a few weeks until the big day, retailers will continue to aggressively promote their in store and online offerings, looking to entice today’s very budget” said National Retail Federation President and CEO Matthew Shay.

More than 131 million (54.8 percent) shoppers plan to go online for Cyber Monday, up from 129 million last year, according to NRF estimates.

Other Economic Data This Week

On Monday the Institute for Supply Management (ISM) will report about the ISM’s factory index followed by its services index due on Wednesday.

Domestic car and truck sales are scheduled for release on Tuesday.

ADP will provide their November report on private-sector payrolls on Wednesday while weekly U.S. jobless claims will be released on Thursday.

U.S. factory orders will be reported on Thursday.

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