Global Economics News Weekly Update

Global Economics News Weekly Update

S&P Global: US Services Sector Expansion Moderates in January 2025

Released on January 6, 2025, the S&P Global Markit Services PMI for January 2025 indicated a possible moderation in US services sector expansion, with a forecast of 55.1, down from the previous 56.1. Based on surveys of various private service companies across industries like transport, finance, IT, hospitality, and telecommunications, the PMI evaluated metrics such as order volumes, completed work, employment, and price trends. While the reading remained above the 50 threshold, signifying continued growth, the slight decrease suggested a potential weakening in the pace of expansion. The next release is on February 5, 2025, expecting a slight positive trend of 55.6%.

JOLTS Report Shows Drop in Job Openings

The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) report, released on January 7, tracked job vacancies across various sectors, reflecting open positions on the last business day of the reporting month. The report carried a forecast of 7.380 million job openings, down from the previous forecast of 7.744 million, suggesting a potential decrease in vacancies. Based on employer surveys capturing data on employment, hires, separations, and openings, the JOLTS report aimed to provide a comprehensive view of the labor market. While a rise in job openings could have indicated economic expansion and potentially exerted upward pressure on the US dollar due to increased investment, the report emphasized the need for careful consideration of various economic factors and cautioned against relying solely on this single indicator. The next release, set for February 4, 2025, is expected to recover with a forecast of 7.603 million.

ADP Employment Forecast: January 2025

Released on January 8, 2025, the ADP Nonfarm Employment Change forecast projected a gain of 120,000 jobs, a decrease from the previous forecast of 146,000. The report, which focused on approximately 400,000 private US enterprises across 19 manufacturing sectors (excluding agriculture), offered insights into industrial employment trends. While employment growth theoretically could have exerted upward pressure on the US dollar due to perceived economic health and increased investment, the report emphasized the inherent limitations of economic forecasts, cautioning that actual employment figures could have deviated from the projection. However, optimism for the February 5, 2025 report is expected, since this is going to be a modest recovery to 121 K.

Consumer Credit Forecast Revised Down Significantly

The Federal Reserve System's Consumer Credit report revealed a significant revision to the December 2024 forecast, projecting $11.31 billion in consumer credit, a considerable decrease from previous estimates of $19.24 billion. This shift, focusing exclusively on personal loans excluding real estate-secured ones, suggested a potential moderation in consumer spending, possibly due to economic uncertainty or rising interest rates. Data for the report came from various sources, including banks, financial companies, retailers, and credit unions. 

Slight Increase in Unemployment Forecast

On January 10, the Bureau of Labor Statistics (BLS) released its latest assessment of the United States unemployment rate, providing a snapshot of the nation's labor market. The report measured the proportion of the civilian workforce actively seeking employment but unable to find it, serving as a key indicator of the labor market's condition. Forecasts suggested a potential marginal increase in the unemployment rate to 4.3% from the previous 4.2%, though it acknowledged these were projections subject to change due to unforeseen factors.