US: NFP, manufacturing and PCE inflation in focus this week - Nomura

Analysts at Nomura expect the US employment report for the month of October this week to show a 175k increase in nonfarm payroll employment and solid wage growth.

Key Quotes

“A 0.2% m-o-m increase in AHE will likely translate into 3.1% on a 12-month basis as base effects help raise the y-o-y rate 0.3pp. In addition, we expect the unemployment rate to hold at 3.7%.”

“This week will also be important for manufacturer sentiment as we believe the ISM manufacturing index will moderate somewhat to 59.0, a still-healthy reading consistent with expanding activity. Given the recent imposition of additional tariffs on Chinese imports in late-September, there is some risk of deterioration in manufacturer sentiment beyond what we currently expect.”

“Finally, we expect core PCE inflation for September to register 0.155% m-o-m, leaving the y-o-y rate unchanged at 2.0% (1.965%). Core PCE price inflation matched our expectation of 1.6% q-o-q saar in Q3, consistent with our medium-term inflation outlook.”