5thApril 2024Friday On Friday, aflurry of significant economic...

5^thApril 2024

Friday

On Friday, aflurry of significant economic announcements is on the horizon. Great Britaingears up to release its Construction PMI, while Canada will make headlines withthe announcement of its Ivey PMI. The day will also witness high-impactreleases, as Canada reveals its Employment Change and Unemployment Ratefigures, closely followed by the US's disclosure of Average Hourly Earningsmonth-on-month, Non-Farm Employment Change, and Unemployment Rate statistics.Investors and analysts alike are eagerly awaiting these updates, as they couldpotentially shape market trends and investor sentiment moving forward.

GBP - Construction PMI

The ConstructionPurchasing Managers' Index (PMI) is a pivotal economic metric that offersmonthly insights into the construction sector's health, derived from surveys ofabout 150 purchasing managers within the industry. Released on the thirdbusiness day following the month's conclusion, the index functions as adiffusion gauge, where readings above 50 signal industry expansion, and thosebelow indicate contraction. This indicator is closely watched by traders andeconomists as it serves as a leading signal of economic vitality, reflectingthe immediate responses of businesses to fluctuating market conditions. Thesurvey probes into various facets of business activity, such as employmentlevels, production rates, new orders, pricing trends, supplier delivery times,and inventory levels, providing a comprehensive snapshot of the constructionsector's current state and its implications for the broader economy.

The S&PGlobal UK Construction Purchasing Managers’ Index (PMI) for February stood at49.7, exhibiting a modest increase from January's 48.8. This marks its highestlevel since August 2023, inching closer to the neutral threshold of 50.0. Theslight improvement in the PMI indicates a near-stabilization of businessactivity across all three main categories of construction. Notably, housebuilding experienced a significant turnaround, reaching a level of 49.8, thehighest since November 2022. Despite challenges such as subdued performance inthe commercial segment and constraints in budget setting, the uptick in the PMIsuggests a cautiously optimistic outlook for the construction sector, signalingpotential recovery in the near future.

TL;DR

• UK Construction PMI for February: 49.7, up from January's 48.8.
• Highest PMI level since August 2023, close to the neutral 50.0 mark.
• House building index at 49.8, its peak since November 2022.
• Sector shows cautious optimism despite commercial and budget issues.

The forecast forthe Construction PMI indicates a figure of 50, compared to theprevious outcome of 49.7.

The next Construction PMI isscheduled to be released on Friday at 8:30 AM GMT.

CAD - Employment Change

The EmploymentChange report, a crucial economic indicator, is unveiled roughly eight daysfollowing the conclusion of each month, detailing the fluctuations inemployment figures from the preceding month. This data, given its significanceand the promptness of its release, often has a substantial impact on thefinancial markets. The number of jobs created serves as a vital leadingindicator, shedding light on consumer spending trends, which constitute asignificant portion of overall economic activity. Traders and investors closelymonitor this report, as it provides key insights into the health of the labormarket and the potential direction of economic momentum.

Canada's labormarket experienced a robust upswing in February 2024, with the addition of 40,700jobs, surpassing both the previous month's gains and market expectations. Thesurge was primarily attributed to an increase in full-time employment,especially within the services sector, highlighted by significant growth inaccommodation, food services, and professional, scientific, and technicalservices, though some sectors like education faced setbacks. Notably, regionssuch as Alberta and Nova Scotia witnessed considerable employment growth, incontrast to a decline in Manitoba. Despite the positive job growth, theunemployment rate experienced a slight uptick to 5.8%, reflecting a growinglabor force outpacing job availability. The period also saw a continuation ofwage growth, with average hourly wages rising by 5% year-over-year. The employmentlandscape was further characterized by the sustained prominence of remote workand a notable public sector employment increase, amidst ongoing challenges suchas the gender wage gap and shifting employment rates.

TL;DR

	Metric/Aspect	Details
1	Job Addition in February 2024	40,700 jobs added
2	Comparison with Previous Month and Expectations	Surpassed previous month's gains and market expectations
3	Primary Growth Area	Full-time employment in the services sector
4	Notable Sectors with Growth	Accommodation, food services, professional, scientific, and technical services
5	Sectors with Setbacks	Education
6	Regions with Significant Growth	Alberta and Nova Scotia
7	Region with Decline	Manitoba
8	Unemployment Rate	Increased to 5.8% due to a growing labor force
9	Wage Growth	Average hourly wages rose by 5% year-over-year
10	Remote Work	Continued prominence
11	Public Sector Employment	Notable increase
12	Ongoing Challenges	Gender wage gap, shifting employment rates

The forecast indicates a figure of 20,000,in comparison to the previous month's figure of 40,700.

The next Employment Change is set tobe announced on Friday at 12:30 PM GMT.

CAD - Unemployment Rate

The monthlyUnemployment Rate, a key barometer of the labor market's health, is announcedapproximately eight days after the month concludes. This figure represents thepercentage of the workforce that is not employed but is actively looking forwork. Despite being traditionally considered a lagging indicator, theunemployment rate is closely watched by traders and economists for its profoundimplications on overall economic health. This is because the level of consumerspending, a major driver of economic activity, is intrinsically linked to labormarket conditions. A rise or fall in unemployment can signal shifts in consumerconfidence and spending, making this statistic a critical piece of the economicpuzzle for market participants.

In February,Canada's unemployment rate marginally increased by 0.1 percentage points to5.8%, continuing the stable trend observed since it rose from 5.1% in April to5.8% by November 2023. The labor force participation rate held steady at 65.3%.Among core-aged individuals, men saw a rise in unemployment to 5.3% due to moreentering the job market, while women experienced a decrease to 4.6%. Youthunemployment rose notably among men aged 15 to 24 to 12.0%, with a slightchange for young women to 11.1%. The youth labor force participation rateclimbed to 63.3%, the first increase since December 2022, despite ayear-over-year decline for both genders. Older women saw a slight uptick inunemployment to 4.5%, whereas the rate for men aged 55 and older remainedconstant at 4.6%.

TL;DR

	Demographic	Unemployment Rate February 2024	Change from Previous Month	Labor Force Participation Rate
1	Overall	5.8%	+0.1 percentage points	65.3% (steady)
2	Core-aged Men (25-54)	5.3%	Increased (more entering job market)	-
3	Core-aged Women (25-54)	4.6%	Decreased	-
4	Youth Men (15-24)	12.0%	Notably increased	63.3% (increased since December 2022)
5	Youth Women (15-24)	11.1%	Slightly changed	63.3% (increased since December 2022)
6	Older Women (55+)	4.5%	Slight uptick	-
7	Older Men (55+)	4.6%	Remained constant	-

The forecast forthe Unemployment Rate suggests a rise to 6.1%, up from theprevious outcome of 5.8%.

The upcoming announcement for the UnemploymentRate is scheduled for Friday at 12:30 PM GMT.

USD - Average Hourly Earnings m/m

In the latesteconomic updates, the Average Hourly Earnings month-on-month report, a keyindicator of labor inflation, is set to be released typically on the firstFriday following the month's end. This data, crucial for understanding changesin labor costs excluding the agricultural sector, stands as the earliestinsight into wage inflation dynamics. Notably, the methodology for calculatingthis series underwent significant revision in February 2010 to enhanceaccuracy. For traders and financial analysts, this report is of paramountimportance as it serves as a leading indicator of consumer inflation. Therationale is straightforward: as businesses incur higher labor expenses, theseincreased costs are often transferred to consumers, influencing broaderinflationary trends and potentially shaping monetary policy decisions.

In February, theaverage hourly earnings for employees on private nonfarm payrolls saw a slightincrease, with a 5-cent rise to $34.57, marking a 0.1 % increase for the monthand a 4.3 % rise year-over-year. Earnings for private-sector production andnonsupervisory employees also increased by 7 cents to $29.71. The averageworkweek for all employees on private nonfarm payrolls rose slightly by 0.1 hoursto 34.3 hours. Manufacturing work hours remained stable at 39.9 hours, withovertime increasing to 3.0 hours. For production and nonsupervisory employees,the average workweek went up by 0.3 hours to 33.8 hours. Additionally,revisions to previous months' employment data reduced the total nonfarm payrollemployment gains for December and January by 167,000, with December's figuresadjusted to +290,000 and January's to +229,000.

TL;DR

• Average hourly earnings on private nonfarm payrolls increased by 5 cents to $34.57, a 0.1% monthly and 4.3% annual rise.
• Private-sector production and nonsupervisory employees saw earnings increase by 7 cents to $29.71.
• The average workweek for all private nonfarm employees rose by 0.1 hours to 34.3 hours.
• Manufacturing work hours stable at 39.9 hours, with overtime up to 3.0 hours.
• Workweek for production and nonsupervisory employees increased by 0.3 hours to 33.8 hours.
• Revisions reduced December and January's total nonfarm payroll gains by 167,000, to +290,000 and +229,000 respectively.Top of Form

The forecast forAverage Hourly Earnings m/m suggests a 0.3% increase, compared tothe previous outcome of 0.1%.

The release for Average Hourly Earnings m/mis scheduled for Friday at 12:30 PM GMT.

USD - Non-Farm Employment Change

The Non-FarmEmployment Change report, a crucial piece of economic data, highlights thechange in employment figures across the United States, excluding theagricultural sector. Scheduled for release typically on the first Fridayfollowing the end of the month, this indicator provides a timely snapshot ofemployment trends. Its significance, coupled with the promptness of itsavailability, often results in considerable movements within financial markets.Traders and investors pay close attention to this report as it serves as a keyleading indicator of consumer spending, which drives a significant portion ofthe country's economic activity. A positive change in employment numberssuggests increased consumer spending potential, thereby signaling robusteconomic health, while a decline can indicate potential slowdowns, making thisreport a crucial tool for market analysis and decision-making.

In February 2024,the US labor market outperformed expectations by adding 275,000 jobs,surpassing the anticipated 200,000 and the revised January figure of 229,000.Notable job increases were observed in the health care sector with 67,000 newpositions, particularly in health care services and hospitals, eachcontributing 28,000 jobs. The government sector added 52,000 jobs, with localgovernment roles, excluding education, accounting for 26,000 of these. The foodservices and drinking places industry saw a significant uptick of 42,000 jobs,reversing a previous trend of stagnation. Additionally, the social assistanceand transportation and warehousing sectors added 24,000 and 20,000 jobsrespectively, the latter buoyed by a 17,000 increase in couriers and messengersroles, following a 70,000 job decline over the preceding three months.Construction employment grew by 23,000, while manufacturing saw a slightdecrease of 4,000 jobs. The initial job gain estimates for January and Decemberwere significantly revised downwards, resulting in a combined 167,000 fewerjobs than initially reported, with January's figure adjusted from 353,000 to229,000, and December's from 333,000 to 290,000.

TL;DR

	Sector	Job Changes in February 2024	Notable Details
1	Total	+275,000	Surpassed expectations of 200,000
2	Health Care	+67,000	Health care services and hospitals each added 28,000 jobs
3	Government	+52,000	Local government (excluding education) contributed 26,000 jobs
4	Food Services and Drinking Places	+42,000	Marked an uptick reversing previous stagnation
5	Social Assistance	+24,000	-
6	Transportation and Warehousing	+20,000	Couriers and messengers up by 17,000, following a 70,000 decline in the past 3 months
7	Construction	+23,000	-
8	Manufacturing	-4,000	Slight decrease
9	Revised Figures	January: +229,000; December: +290,000	Downwards revision of 167,000 for the combined previous months

The upcoming release for Non-FarmEmployment Change is scheduled for Friday at 12:30 PM GMT.

The forecast for Non-Farm EmploymentChange suggests 198,000, down from the previous outcome of 275,000.

USD - Unemployment Rate

The UnemploymentRate, a key metric reflecting the health of the labor market, is reportedmonthly, typically on the first Friday following the month's close. This ratemeasures the percentage of the workforce that is without employment butactively seeking work. While often considered a lagging indicator, thesignificance of the unemployment figures extends beyond mere statistics. Fortraders and economic analysts, these numbers are a vital sign of the nation'seconomic vitality, given the strong correlation between consumer spending andlabor market conditions. Moreover, the unemployment rate plays a critical rolein shaping monetary policy, as policymakers weigh its implications in theirdecisions. This makes the monthly report much more than a snapshot ofjoblessness; it's a lens through which the broader economic landscape is viewedand understood.

In February2024, the U.S. saw varied changes in unemployment rates across states, withincreases in three states, decreases in three, and stability in 44 states plusthe District of Columbia, according to the U.S. Bureau of Labor Statistics.Over the year, 28 states experienced higher unemployment rates, while three sawdecreases, and 19 states along with the District had minimal changes. Thenational unemployment rate rose slightly to 3.9%, marking a 0.3 percentagepoint increase from February 2023. Notably, North Dakota boasted the lowestunemployment rate at 2.0%, whereas California had the highest at 5.3%. Nonfarmpayroll employment saw an uptick in four states, remained mostly unchanged in46 states and the District, and increased in 25 states over the year. Thesestatistics draw from household surveys for individual data and establishmentsurveys for nonfarm employment, providing a comprehensive overview of thenation's employment landscape.

TL;DR

• Varied changes in state unemployment rates: 3 states increased, 3 decreased, stability in 44 states + DC.
• Over the year: 28 states saw higher unemployment rates, 3 lower, 19 + DC minimal changes.
• National unemployment rate rose to 3.9%, up by 0.3 percentage points from February 2023.
• Lowest state unemployment rate: North Dakota at 2.0%.
• Highest state unemployment rate: California at 5.3%.
• Nonfarm payroll employment: Increased in 4 states, mostly unchanged in 46 + DC, increased in 25 states over the year.
• Data sources: Household surveys for individual data, establishment surveys for nonfarm employment.

The forecast forthe Unemployment Rate suggests it will remain unchanged at 3.9%,mirroring the previous outcome.

The upcoming release of the UnemploymentRate is set for Friday at 12:30 PM GMT.

CAD - Ivey PMI

The IveyPurchasing Managers' Index (PMI) is a significant economic indicator derived froma survey of approximately 175 purchasing managers, strategically selectedacross various geographic locations and sectors to represent the broadereconomy. Released monthly, around five days after the month's conclusion, theindex provides insights into the business climate by measuring the level of adiffusion index. A reading above 50 signifies expansion within the industry,while a value below 50 indicates contraction. Notably, in March 2011, theseries underwent a revision to adjust for seasonal factors. Traders andfinancial analysts monitor the Ivey PMI closely as it is considered a leadingindicator of economic health. The rapid response of businesses to changingmarket conditions is captured through the purchasing managers' perspectives ona range of business activities, including employment, production, new orders,prices, supplier deliveries, and inventories, making it a valuable tool forgauging the economic outlook.

In February2024, Canada's Ivey Purchasing Managers Index saw a decrease to 53.9 from theprevious month's 56.5, indicating a moderation in economic activity while stillreflecting the continuation of growth for the seventh consecutive month.Despite this dip, the overall expansion persisted, albeit at a slightly slowerpace. Notably, there was a rise in the inventories index to 53.6 from January's50.3. However, other significant indicators such as employment, supplierdeliveries, and prices experienced declines, with respective figures of 50.8(down from 57.2), 50.3 (down from 51.8), and 60.4 (down from 62.2).Encouragingly, the unadjusted PMI showed an increase from 54.4 to 56.3,suggesting some underlying resilience in the face of varying economic factors.

TL;DR

	Indicator	February 2024 Value	Change from Previous Month	Trend
1	Ivey Purchasing Managers Index	53.9	Decrease from 56.5	Moderation in economic activity, still reflecting growth
2	Inventories Index	53.6	Increase from 50.3	Rising inventories
3	Employment	50.8	Decrease from 57.2	Decline in employment
4	Supplier Deliveries	50.3	Decrease from 51.8	Slower supplier deliveries
5	Prices	60.4	Decrease from 62.2	Decline in prices
6	Unadjusted PMI	56.3	Increase from 54.4	Underlying resilience in the face of economic factors

The forecast for the Ivey PMIsuggests a reading of 51.6, down from the previous outcome of 53.9.

The next Ivey PMI is set to bereleased on Friday at 2:00 PM GMT.