Markets shrugged off the third quarter of GDP contraction last week, as manufacturing conditions improved slightly and consumer confidence surprisingly advanced. The first week of May promises to be just as exciting, with the results of the Stress Tests to be posted Thursday afternoon.
The data highlight this week is the Employment Report on Friday. Analysts expect that 625,000 jobs were clipped from the U.S. economy in April, marking the 16th straight month of losses. Forecasts could change based on the ISM non-manufacturing data on Tuesday, and the ADP private employment report on Wednesday.
Further Detail:
Monday begins the week with two bits of data at 10 am EST. The Pending Homes Sales Index is expected to be unchanged in March, after rising 2.1% in February. The index may give hope that the housing market is stabilizing. Construction Spending will be less pretty ― analysts are looking for drop of 1.7% in March, after falling 0.9% in February and 3.5% in January.
Fed chairman Ben Bernanke will also testify to the Joint Economic Committee on Capitol Hill. Congress is expected to question Bernanke on central bank policies of oversight and transparency.
Tuesday opens with the ISM non-manufacturing index at 10 am, a key index of the services, financial, construction sectors. The nationwide survey of executives is expected to come in at 42.0, up slightly from the 40.8 reading in March. Anything below 50 signifies overall contraction, but improvement is still improvement. After markets close, the weekly Consumer Comfort Survey from ABC News hits the wires.
On Wednesday, the ADP Employment Survey is released at 8:30 am. The private employment index can be influential to those forecasting the official employment statistics released by the government two days later.
Thursday sees the release of Jobless Claims. The weekly index saw 638,000 people file for unemployment benefits in the week ending April 25, and analysts look for a similar figure for the first week of May. Also released at 8:30 am is Productivity and Unit Labor Costs for Q1 2009. Productivity is expected to have risen 0.4%, erasing the 0.4% fall in the last quarter of 2008, while labor costs are set to rise 3.1%, a slower advance than the 5.7% gain in the prior quarter.
Friday will be the key day this week, as markets digest the Thursday afternoon results of the stress tests and incorporate that with the April employment figures. Nonfarm Payrolls are expected to show 625,000 jobs vanish from the economy in April, on top of the 5.1 million jobs already lost since the recession began in December 2007. The Unemployment Rate is anticipated to hit 8.9%, following the advance to 8.5% in March.