Key Economic Events to Watch This Week

This week brings four pivotal economic events that could significantly impact investment portfolios. These events may influence market sentiment and provide insights into the Federal Reserve’s future policy directions.

This week, on Wednesday, October 30, the Q3 2024 GDP Growth Annualized (advance estimate) will give an early glimpse into the economy’s recent performance. Economists project the growth rate to hold steady at 3%, similar to Q2. Should this week’s reading surpass expectations, it could prompt a shift in investor sentiment, potentially delaying expectations for Fed rate cuts. Conversely, if GDP growth falls short, it could lend support to further rate reductions from the central bank.
On Thursday, October 31, this week’s data will continue with September’s Core Personal Consumption Expenditures (Core PCE) report, a critical measure of inflation. By excluding volatile categories like food and energy, the Core PCE provides a clearer picture of underlying consumer spending patterns. As the Fed’s preferred inflation gauge, a higher-than-expected Core PCE could push policymakers to remain cautious on rate cuts.

Moving on to Friday, November 1, this week’s spotlight will fall on the October Nonfarm Payrolls and Unemployment Rate report, key metrics for labor market health. With the Federal Reserve’s mandate of full employment, a strong labor market would signal economic resilience, while weaker employment figures might encourage the Fed to consider rate cuts to support growth.

Also on Friday, October’s ISM Manufacturing PMI will shed light on conditions within the U.S. manufacturing sector. This week’s PMI reading is a trusted economic indicator that can reveal shifting trends in business activity. A strong reading often points to growth, while a lower PMI signals potential economic slowdowns, making this week’s data especially crucial for forecasting future trends.

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