Economic calendar: Will wage growth shoot up?

Summary:

• US jobs report could offer a huge surprise in terms of wage growth

• UK construction PMI on the agenda before noon

• More data from US as well as Canadian employment numbers

9:30 am GMT - UK construction PMI: Admittedly construction does not seem to be particularly relevant for the UK economy, it could give some hints with regard the overall level of optimism in the entire industrial sector. Let us remind that we got a disappointing release of manufacturing PMI yesterday as it slid to 51.1 from 53.6 points and missed the consensus of 53. It seems to coincide with the broad-based slowdown in manufacturing across Europe though. Today the median estimate suggests that construction PMI fell only modestly in October to 52 from 52.1. On top of that we will be offered final readings of manufacturing PMIs from European economies. In case of Spain and Italy where no preliminary readings are published manufacturing PMIs are expected to have declined to 50.9 and 49.7 respectively.

12:30 pm GMT - US and Canadian jobs data: It’s the first Friday of a month hence it’s a jobs day - not only in the US but in Canada as well. Beginning with the former employment in a non-farm sector is expected to have grown by 200k compared to 134k in September - this number seems to be reasonable taking into account another sound ADP report we got earlier this week. The unemployment rate is forecast to have stayed at 3.7% while the average hourly hours are anticipated to have risen to 3.1% YoY. Note that this a solid forecast is based on exceptionally favourable base effects from the past year when wage growth dipped to 2.3% from 2.8%. When it comes to the Canadian labour market the overall change in employment should come in at 15k, the jobless rate should hold unchanged at 5.9% while the hourly earnings for permanent employed ought to tick up to 2.3% YoY from 2.2% YoY seen in September.

Other data from the US - Trade balance (12:30 pm GMT), factory and durable good orders (2:00 pm GMT): In case of factory orders the median estimate suggests they increased 0.5% MoM in September, as you see it’s a bit obsolete data hence its impact on any assets could be limited. The same should apply when it comes to durable goods as it will be the final print for September.