Welcome to the Investors Trading Academy economic calendar of the week. Each week our news analysts review the upcoming economic events that you should be monitoring. As the second month of the year begins traders are glad to say goodbye to January which hopefully is not an indication of what’s ahead. The January jobs report will highlight this week’s economic calendar.
While analysts are forecasting another strong month of job creation, much of the focus will be on wage growth. In December, the labor market exceeded expectations by creating 292,000 jobs as the headline unemployment rate held steady at 5%, a seven-and-a-half-year low.
But wages barely rose from a month earlier, a long-running problem that has vexed Federal Reserve policy makers who would like to see higher wages lift prices and inflation upwards toward the Fed’s 2% target.
The January report, due to be released by the Labor Department on Friday, is expected to reveal more than 200,000 new jobs were created last month but that wages remained essentially stagnant.
If that’s the case it will give the Fed additional pause as policymakers, consider raising interest rates at their next meeting in March. The Fed raised rates in December for the first time in nearly a decade citing in particular a strong labor market.
Also due is a report on personal income and outlays. This is also a key inflation indicator as it sheds light on how much Americans are making and spending. If those numbers are rising than so will inflation. The report is due out Monday.
Elsewhere this week China data takes centre stage with manufacturing PMI figures. We also have meetings from the RBA and the BoE, which may well join their counterparts at the BoJ and European Central Bank in becoming more dovish.
Bank of England governor Mark Carney will have a chance to explain the Monetary Policy Committee´s take on recent events in global capital markets, following recent 'dovish' remarks from some MPC members and his peers in the Eurozone and Japan.
On Thursday, the MPC will decide on interest rates and the BoE will publish its latest Inflation Report.
However, the reaction to any remarks might be muted given that the monthly US employment report is scheduled to be published the next day right on the heels of a non-committal Fed policy statement on 27 January. Setting the stage for the governor will be a raft of manufacturing sector data from around the globe, the UK included.
Earnings season still has some way to go in the US, with key names such as Alphabet -Google to most people, ExxonMobil, ConocoPhillips and LinkedIn to dominate the agenda. Full-year earnings from pharma giants GSK and AstraZeneca will be key for the UK market, along with online supermarket Ocado, which needs to post good figures as Amazon continues to talk about opening its own online grocery arm in the UK.

By Barry Norman, Investors Trading Academy - ITA