All Eyes on US Labour Data with Days to Go Until Election

At 1230 this afternoon, attention will turn to the release of US labour data as markets look for further insight into the health of the world’s largest economy just days before the US electorate head to the polls.

As with previous months, given that the labour market has been the key driver of inflationary pressure in the US, markets will also be paying particular attention to the extent to which today’s figures could impact policy makers ahead of next FOMC on 7 November.

Moreover, with 81% of US voters indicating that the economy is “very important” in their vote for the presidential election (according to Pew Research), much of the electorate could well consider today’s figures (which includes payrolls, unemployment rates, and wage growth), as an important litmus test for how the economy is performing just days away from casting their ballot.

This afternoon’s figures will follow Wednesday’s ADP employment print which smashed expectations, hitting 233,000 against a consensus which was pointing to 115,000. Here, ADP’s chief economist said that “Even amid hurricane recovery, job growth was strong in October. As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient. With this marking the strongest print since July 2023, markets now look to see whether the strength of the ADP print – which looks at private sector payrolls from more than 25 million U.S. employees – will be reflected into today’s nationwide data.

Last month, nonfarm figures indicated that the US economy posted 254,000 new jobs over September, well surpassing expectations. This represented the strongest print in six months, and marked a significant increase from June, July and August’s figures which came in at 118,000, 144, and 159,000, respectively.

September’s figures also came in stronger than the rolling 12-month average, which stood at 230,000.

The print helped to assuage fears that the US labour market may be slowing down, concerns which gained traction after the Bureau of Labor Statistics downwardly revising payrolls by 818,000 in the year ending to March 24, a few months ago.

In a sign that the labour market may also be more robust than previously thought, wage growth also came in stronger than expected, hitting 4% on an annualised basis and 0.4% on a monthly basis.

Hence, just days away from the Election and FOMC, today’s data (which includes nonfarm payrolls (exp. 113,000), unemployment rate (exp. 4.1%) and earnings (exp. 4%)) will therefore be closely monitored and hotly anticipated.

Deadly floods continue to cause havoc in Valencia as the death toll rises past 150 with dozens more missing. It’s understood that a years’ worth of rainfall fell within just eight hours – representing the deadliest flash flooding since the 1970s.

Alongside the death toll, houses and infrastructure including bridges and transportation networks have been devastated. Countless households have also been left without electricity and water, with vast areas of agricultural land also underwater in what is Spain’s key citrus growing area.

Earlier this week the Spanish PM said that “For those who at this moment are still looking for their loved ones, the whole of Spain weeps with you.”

According to the World Meteorological Organisation, some 2.5bn people were impacted by flooding between 1994 and 2013, with the damage being caused by flooding exceeding $40bn each year.

In 2022, PwC estimated that over 40% of the world’s urban population will see an increase in flood risks by 2050. And that same year, they also noted that of the ten most adverse weather events in 2020 and 2021, four involved flooding, with estimated damages of $72.2bn.

Last month, over 215 people were killed after flash floods swept through areas of Nepal, including in the nation’s capital, Kathmandu. With thousands more families losing their homes and access to essentials, the head of the Red Cross there said that “As Nepal faces the increasing threat of climate change, which has intensified disasters like this, preparedness within communities will be the key.