Big Week for the Economy

This week we will get, on Friday, the all important jobs number. However, other important numbers are coming out this week, too.

Today we saw a blah rise of .4% to personal income and spending up .3%. Yawn. Two other numbers were alarming, though. The Dallas Fed went negative for the first time this year from +10.8 to -3.4. You don’t have to be a business genius to see that isn’t good. It’s the lowest in seven months. The Chicago PMI went lower, too, the lowest since November 2009. It plunged from 67.2 last month to 56.2 this month. Again, a drop any moron would see is bad.

The Blaze has outlined the rest of the week:

Tuesday, May 1 is another big day for meaty data. In the US we get the ISM Manufacturing Index, Construction Spending, and auto sales. Auto sales are particularly important to us, as they make for a great barometer for employment (which we’ll find out a lot more about later in the week). ALSO on Tuesday we get the beginning of one of the most exciting days for the economy: Global PMI Day. That’s when all the countries have their April PMI reports released. It will really kick off with a bang, when the Chinese Manufacturing PMI comes out at 10:30 US time. Actually, Japanese and South Korean numbers come out a bit earlier in the evening, so that’s technically when things will kick off.

Wednesday, May 2 will see a continuation of the PMI releases. In the early hours of the US day, we’ll get fresh numbers for all of the European economies. Then in the US that day we get Factory Orders and the ADP jobs report, a key preview for Friday’s main-event Non-Farm Payrolls Report. And remember, there are tons of earnings throughout.

Thursday, May 3 will see the entrance of the central banks. The ECB is meeting in Barcelona, and will make its latest monetary policy decision at 7:45 AM ET. It is possible that we’ll get some movement, or a chance in policy. The Eurozone is clearly on the skids, economically, and a rate cut is called for. The Mario Draghi press conference at 8:30 AM ET will be scrutinized to see what, if anything, he says about the surge in rates in Spain and Italy and so forth. There‘s been a growing din about ’growth’ in Europe, and how to make it happen. We’ll see if Draghi moves the ball forward on this front. In the US on Thursday we get initial jobless claims (which have been uncomfortably high three weeks in a row), productivity data, and the ISM Services report.

Friday, May 4 brings the granddaddy of economic reports: The Jobs Report. The current estimate is for just 162K new jobs created… which would definitely signal a downshift from the recent trend. Of course, there’s tons of sub-data within the jobs report that will be picked over like crazy.

Today’s poor readings do not bode well for the rest of the data as Bob Pisani of CNBC says:

Ugh! Is this the worst case economic scenario?

I noted this morning that the regional manufacturing indexes — including this morning’s Chicago and Dallas figures — have almost without exception been below expectations.

If the April ISM, out tomorrow, and the April jobs report, due out Friday, are also below expectations, we will see gross domestic product growth revised downward by many firms.

How much downward? Jan Hatzius at Goldman Sachs on Friday said this week’s jobs report will likely show growth of just 125,000, well below consensus of about 168,000. Why the weak forecast? He says jobs growth in the winter was largely in the cold weather states — suggesting jobs were pulled forward by warm weather.

Hatzius is expecting just two percent GDP growth in the second and third quarters.

This is the worst of all possible worlds: It is not robust enough for any real job growth (we would need north of three percent GDP growth for that), but it is not weak enough for the U.S. Federal Reserve [cnbc explains] to act aggressively by instituting some form of quantitative easing [cnbc explains] , or a new form of “Operation Twist.”

Where does that leave us? Languishing.

Even after the work week ends, other events will weigh in on the future.

Sunday is election day in France. Right now it looks like Socialist Francois Hollande will claim victory over conservative Nicolas Sarkozy. There are Greek elections and Italian elections May 6 and 7th that also will impact the economic status of Europe and later, us.

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