Is the US job market still booming?

The crushing US jobs report in January turned markets around and expectations about how far the Federal Reserve would have to go to cool the economy. February’s figures, due out Friday, will show whether the January hiring boom was an anomaly or part of a broader pattern that could worry officials.

The Labor Department is expected to report that 215,000 US jobs were added in February, according to economists polled by Bloomberg, a big step down from the 517,000 added in January. However, a surprise is possible – the January figure was almost three times higher than forecasts.

The unemployment rate is expected to remain at 3.4 percent, the lowest level in more than 50 years. Average hourly earnings are forecast to remain flat at 0.3%.

This data will be an important component of the Fed’s meeting at the end of March, which will determine its next step in policymaking. The central bank slowed the pace of monetary tightening last month by raising interest rates by 0.25 percentage points after a series of hikes of 0.75 and 0.5 percentage points last year. While the Fed is widely expected to raise rates again by 0.25 percentage points in March, employment data will influence how many more hikes come after March.

A strong labor market usually means higher wages, which is one of the sources of inflation. The employment data, however, is just one of the growing evidence that US inflation is picking up again. Both the consumer price index and the personal consumption price index rose more than expected in January. Keith Dugid

Could Kuroda throw a surprise at his latest BOJ meeting?

Markets are adjusting to the idea that academic Kazuo Ueda will become the new governor of the Bank of Japan next month. But rumors are mounting that surprise-loving incumbent Haruhiko Kuroda may fire a parting shot at his final monetary policy meeting this week.

The focus is on the possibility of adjusting the Bank of Japan’s yield curve management (YCC) policy, a mechanism by which the central bank tried to fix the level of 10-year Japanese government bonds, but in doing so drained much of the liquidity from this part of the market.

Some investors expect significant adjustments to YCC at the start of Ueda’s tenure, while others see the prospect of abandoning it entirely. However, in the short term, the Bank of Japan may make a slight adjustment in the policy range.

In December, much to the surprise of the markets and contrary to the decidedly dove tone of his previous comments, Kuroda reversed the YCC by widening the range of 10-year rates around the target.

Takeshi Yamaguchi, chief Japan economist at Morgan Stanley MUFG Securities, estimates the likelihood of a similar move by the BOJ this week at just 20 percent, unlikely given that risks of extreme yen weakness appear to have abated.

“The intention to clean a room before handing it over to a new occupant may inadvertently create new problems for the next person,” Yamaguchi said. “For example, the market has not fully priced in the March revision of the YCC, and a sudden revision could lead to a correction in the stock market and an appreciation of the yen.” Leo Lewis

How much did the UK economy grow in January?

The UK economy is expected to expand slightly in January, partly recovering from the decline registered in December, but continuing the main weak trend seen throughout the past year.

Economists polled by Reuters expect data released on Friday to show that gross domestic product rose 0.1% in January after contracting 0.5% the previous month.

Ellie Henderson, an economist at Investec, does not expect “the economic picture to improve significantly in January.” She expects that “the service industry was unable to fully recover its December losses, and strikes in both transport and education likely affected the sector.”

Despite an already recorded 10 percent increase in GP appointments, she expects services to grow by only 0.3 percent per month.

Analysts forecast a 0.2% decline in manufacturing production.

The economy is forecast to stagnate in the three months to January, reflecting the impact of high inflation and rising borrowing costs on household finances and business activity. UK production has yet to reach the levels it reached in the fourth quarter of 2019 before the pandemic, making it an exception among the G7 countries.

The UK economic outlook has improved in recent weeks due to the recent drop in wholesale energy prices, but 2023 remains a “challenging economic environment,” Henderson said. She expects the economy to contract by 0.5 percent this year. Valentina Romey