Previous week update: (https://www.tmotrac.in/forum/economic-events/weekly-lookout-9-24)
The Last week’s Personal Consumption Expenditures (PCE) data for US closely matches expectations, with a year-over-year (YoY) increase of 2.4% and a month-over-month (MoM) rise of 0.3%. Which shows the signs that the period of uncertainties are nearing the end and now things are just needed to be kept in hold till the inflation is under the targeted Fed’s range.
US Economy :
Looking ahead, we have Federal Reserve Chairman Powell's testimony scheduled for Wednesday and Thursday (6th and 7th of March) which is anticipated to provide insights into the Fed's progress over the last quarter and forthcoming plans. This event, followed by a Q&A session, which is highly likely to induce market volatility, given the upcoming election and ongoing concerns about inflation.
On the labor market, the Job Openings and Labor Turnover Survey (JOLTS) data on Wednesday will offer insights into unfilled job openings as of the previous month's last working day. Subsequently, Friday brings the release of the Non-Farm Payroll (NFP) and unemployment rate figures, alongside other employment statistics such as the participation rate and govt., private and manufacturing payroll data.
NFP is expected to be within the range of 195k to 200k, which stood high since December 2023. Unemployment rate expectations remain steady at 3.7%, in line with the past three months' figures.
I’m really surprised with the market's expectations on the NFP's range of 200k, which have remained high at 333k and 353k for December 2023 and January 2024, respectively.
Indian Economy :
Shifting focus to India, recent GDP growth for Q3FY24 figures surpassed expectations at stood at 8.4%. However, there were a side of economists and analysts who cautioned market’s optimism stated that the Gross value added (GVA) component of GDP had just grown at 6.5%. Which widens the gap between GDP and GVA to 1.9%, which averaged at 0.2% over the last 8 quarters period.
From the above formula, the Net taxes is the difference of Total Taxes collected and Subsidies provided by the government. From which we can interpret that, the Net tax adds 1.9% to country’s GDP. Which suggests either there was an increased tax collection or reduced subsidies over the previous quarter which lead to the inflated GDP figures.
Having said the facts, from my view, considering data from the Reserve Bank of India (RBI), the economy growing at 6.5% with inflation of 5.37%, (Avg. inflation for Q3FY24), Growing at real rate of 1.13% is a decent performance given the prevailing global economic conditions.
On the Indian economic front, we have our upcoming figures on Bank Loan and Deposit Growth, along with Money Supply, which are expected this Friday (8th March). Which won’t be having a significant impact over market.
Date : 3rd Mar '24; Source - Trading Economics, Forex Factory, News
LR