Summary
Monday Tee Up: Jobs and Economic Data Galore It’s back to business this week, with a full slate of economic data that includes the jobs report on Friday. Yet it’s not a full trading week as markets will be closed on Thursday, which is a National Day of Mourning for former President Jimmy Carter. Last week, the Dow Jones Industrial Average fell 0.6%, while the S&P 500 and the Nasdaq both dropped 0.5%. Over the two days of trading so far in 2025, the Dow is higher by 0.44%, the S&P is up 1%, and the Nasdaq has popped 2%. On the economic calendar, the big day this week is Friday, with the December jobs report due from the Labor Department. In December, Nonfarm Payrolls clocked in at 227,000. For January, the consensus is 150,000. Our forecast is 125,000. The Unemployment Rate was 4.2% in December, and is not expected to change. In other economic news, Factory Orders will be reported on Monday; Job Openings and the Trade Deficit on Tuesday; and the private payrolls ADP employment report and the minutes of the last Federal Reserve rate meeting will be released on Wednesday. Argus Chief Economist Chris Graja’s Call of the Week is the Average Hourly Earnings component of the jobs report, on which Chris offered the following: ‘Average hourly earnings shouldn’t be overlooked. The Street and Argus are looking for 4% growth. That’s good news for workers. But how does a FOMC member reconcile 4% wage growth with 2% inflation target? The answer is labor productivity that grew a strong 2.2% in 3Q. When workers are producing more, they can be paid more without stoking inflation. Federal Reserve Chairman Jerome Powell actually addressed the issue in his press conference after the last FOMC meeting. He said that wages are ‘still a bit above what would be sustainable if productivity were to revert to its longer-run trend.’ But he added that ‘if you take into account the high productivity readings we’ve had, then wages are already at a sustainable level relative to 2% inflation.’ The next quarterly report on labor productivity is due on February 6. The 20-year average is about 1.7%.’ The new earnings season kicks off in mid-January, with the big banks reporting first. For 2025, Argus forecasts 12% EPS growth for S&P 500 companies. This follows a higher-than-expected 9% for 2024. There are a few companies on the earnings calendar this week, including Jefferies Financial Group and Albertsons on Wednesday; and Delta Air Lines, Constellation Brands, and Walgreens Boots Allianc
