As 2016 Ends, Big Economic News Awaits
The Thanksgiving holiday is over and the final month of 2016 is approaching. The coming week brings a crowded list of important economic events, and beyond it, some big economic news to watch in December.
The most notable news this week should come on Friday with the monthly report from the Bureau of Labor Statistics on developments in the jobs market.
On Thursday, the Institute for Supply Management will release its survey of manufacturers, while BLS provides the weekly tally of initial claims for unemployment insurance. And on Wednesday, the payroll processor company ADP will release its estimate for the Friday jobs number.
Also on Wednesday, the Fed will release the Beige Book report, a qualitative assessment of the economy from the twelve regional Fed district banks that will be used in FOMC deliberations.
All these data have been showing relatively positive trends recently. New updates for all these are important as the final Federal Open Market Committee meeting for 2016 is scheduled for December 13 and 14. It’s widely expected that the FOMC will raise interest rates by 25 basis points at the December meeting. Comments from FOMC members suggest most believe that the economy is strong enough to withstand an interest rate increase. An increase in the federal funds target rate would be the first since December 2015. Our business cycle leading indicators support this view, having shown improvement over the past few months.
Meanwhile, attention will continue to be focused on the developments in the transition to a new president. That attention includes announcements (and speculation about announcements) for cabinet positions and the implications for future policy. Furthermore, the strong performance of U.S. equity markets since the surprise election results remain a major topic.
Finally, the last month of the calendar also brings attention to U.S. consumers and the holiday shopping season. Early reports of Black Friday shopping are already widespread. As we do each year, we caution against reading too much into these very early, very preliminary estimates. There is still a long way to go before the ball drops in Times Square, and lots of new data to analyze along the way.
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