This Week: Jobs Data in Focus Again

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The first week of the economic reporting year and Wall Street activity offers a fresh look at jobs data. Unemployment improved at last check, dropping to 10% from a 10.2% peak, but many economists and yours truly see a good chance for modest uptick this time around. The market needs a reason to move higher now, given last year's stock market gains. That was evident in Monday's market grasping onto the ISM Manufacturing Index, but the employment picture is what January truly hinges on, in my view.

This Week: Jobs Data

Monday

The first day of the new trading year began with a bang. The Institute of Supply Management produced its Manufacturing Index, and it exceeded both expectations and the prior month measure, enthusing shares. However, Wall Street Greek reported the ISM Manufacturing Index data is deceiving, and worth a closer look.

November's Construction Spending Report did not offer complementary news, but was largely overlooked by a frenzied market. Spending declined 0.6%, which was worse than the economists' consensus view, according to Bloomberg. Also, October's reading was revised down, to a decrease of 0.5%, from no change initially reported.

Monday's earnings schedule included only a report from The Mosaic Company (NYSE: MOS).

Tuesday

Motor Vehicle Sales will be reported for the month of December on Tuesday. Economists forecast domestic vehicle sales came in at an 8.4 million annual pace, versus the 8.2 million rate recorded in November. Total motor vehicle sales, which include the sales of imports, increased to 10.9 million in December, compared to 10.5 million in October.

Last week, the International Council of Shopping Centers (ICSC) reported sales data for the all important holiday period. In the week ended December 26, sales improved 0.4% over the prior week, which was impacted by the Northeast blizzard. Sales climbed 2.3% over the prior year period, compared to the slight 0.4% weather impacted prior week gain.

Factory Orders will be reported at 10:00 a.m. Economists forecast Orders increased 0.4% in November, versus the 0.6% gain posted in October. Durable Goods Orders have already been reported for the month, and came in slighter higher (0.2%), almost guaranteeing improved Factory Order figures. Besides this, petroleum and related prices increased, and these tend to drive nondurables and factory orders higher.

Pending Home Sales is due for report at 10:00 a.m. The National Association of Realtors (NAR) is expected to publish November's Pending Home Sales Index at a mark of 111.8, according to Barron's take of economists. A pending sale is one in which a contract was signed, but not yet closed.

Wednesday

Challenger, Gray & Christmas will publish its monthly Job-Cuts Report for December in the early going. Challenger's count of announced corporate layoffs has declined over recent months, and last tallied 50,349 in November, down significantly from the 181,671 planned firings announced in November 2008. Consensus forecasts are not readily available for this figure.

Look for ADP's Private Employment Report to hit the wire also in the pre-market. ADP reported estimated private employment payroll cuts of 169K for November, down from the 203K reported for October. Consensus forecasts are not readily available for this figure.

The Mortgage Bankers Association will report on mortgage activity of the past two weeks on this day. The MBA took last week off, but this data is not typically market moving. However, we have identified interesting trends for you through analysis of the data, and continue to survey the regular report. In recent months, this data has been influenced significantly by the political activity around the renewal of the First-Time Homebuyer Tax Credit.

The Institute for Supply Management (ISM) will produce the second of its broadly followed monthly economic reports on Wednesday. ISM's Non-Manufacturing Index follows up its Monday noted Manufacturing Index gain. The Non-Manufacturing Index is seen recovering in December, after a short dip below the key 50.0 mark that signifies the line between expansion and contraction. In November, the Index dipped to 48.7, but economists are looking for a recovery to 50.4 in December, given a decent last reporting of the New Orders Index and other supporting data.

The Energy Information Administration (EIA) reports on Petroleum Status at its regular 10:30 publishing time. In the week ended December 25, crude oil inventory decreased by 1.5 million barrels. Distillate fuel inventories decreased by 2.0 million barrels as heating demands increased across the country. Total motor gasoline inventory decreased by 0.3 million barrels. Each of these three reported segments still sits near or above the upper limit of the average range for this time of year.

The Federal Open Market Committee (FOMC) is set to post its meeting minutes from its December 15 meeting at 2:00 PM. Market-moving news is not expected, and so the market is vulnerable to a surprise from this report. This news should influence the close on Wednesday.

The earnings schedule includes news from Monsanto (NYSE: MON) and RPM International (NYSE: RPM). Goldman Sachs (NYSE: GS) has a one-day health care conference scheduled for Wednesday. The confab, entitled, "A View from the Top" includes discussions by the chiefs of Merck (NYSE: MRK), Pfizer (NYSE: PFE), Becton Dickinson (NYSE: BDX), Medtronic (NYSE: MDT), Cardinal Health (NYSE: CAH) and Gilead Sciences (Nasdaq: GILD).

Thursday

The Monster Employment Index (MEI) leads the wire on Thursday morning. Monster World Wide (NYSE: MWW) produces this online job demand report monthly. November's data showed a modest one-point deterioration to a level of 119, which is 24 points short of the prior year period. The index has sort of stalled in this territory since a late summer rally.

Weekly Jobless Claims are due for report at the usual 8:30 time. Last week's data, covering the period ended December 26, showed a deep dip in new unemployment benefit filers. Initial jobless claims fell to 432K, down from 454K the prior week. However, we quickly corrected market enthusiasm, when we noted in our article "Wake Up You Jobless Fools" the simple logic behind the drop. We suggested that few firms are heartless enough to layoff folks during the holidays, but we failed to note that busy seasonal shoppers might also find less time to file for benefits for the first time. Look for this week's tally to rise as a result, unless the holiday happiness carried through the week after Christmas as well.

Retailers will be reporting Chain Store Sales for the month of December mostly on this day, but a few will report earlier and some later. Statisticians following the retail market should also report on the general condition among retailers. Wal-Mart (NYSE: WMT), the nation's critical retailer, refrains from monthly reporting, so an important bit of information will be lacking Thursday.

The EIA reports on Natural Gas Inventory at 10:30 on Thursday. Natural gas stocks declined by 124 Bcf in this period of seasonal draw. Gas stores were still 391 Bcf above the five-year average mark for this time of year.

The Fed reports on the state of its balance sheet at 4:30 p.m. Fed representatives James Bullard (St. Louis) and Thomas Hoenig (Kansas City) are due to address separate groups Thursday.

The yearly Consumer Electronics Show kicks off in Las Vegas. Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Nokia (NYSE: NOK) and Qualcomm (Nasdaq: QCOM) are sending key representatives to address the gathering. Raymond James (NYSE: RJF) is sponsoring a Government Services and Technology Summit in Washington D.C. GM’s deadline for Saab offers comes to pass Thursday, and an earnings report is due from Global Payments (NYSE: GPN).

Friday

It's all about the government Employment Situation Report Friday. The unemployment rate is expected to match November's measurement of 10.0%, which dropped down from October's 10.2% reading. Bloomberg reports a 10% expectation, while Barron's notes a 10.1% outlook; Wall Street Greek is looking for a modest increase as well. Nonfarm Payrolls are seen decreasing only by 1K on net, marking significant improvement from over the past few years of deterioration and November's 11K loss.

The Wholesale Trade Report is due for release at 10:00 a.m. Economists see Wholesale Inventories decreasing by 0.3% in November, versus a 0.3% increase in October.

Consumer Credit is due for report at 3:00 PM ET. Credit has contracted for nine months in a row now, as banks and other lenders have tightened credit availability. Economists see a credit contraction of $5.0 billion for November, compared with a $3.5 billion contraction in October.

Federal Reserve reps Eric Rosengren (Boston), Dennis Lockhart (Atlanta) and Jeffrey Lacker (Richmond) are set to speak to various groups on Friday. These speaking engagements are important for investors to follow, since the Fed Governors and Presidents might offer insight into the inner mind of the influential Fed.

We see no earnings reports on the holiday season slate, but Acuity Brands (NYSE: AYI) will hold its annual shareholders meeting. Umar Farouk Abdul Mutalab, the Nigerian born Christmas bomber, has a bail hearing set for this day.

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