US Releases this Week:

Being the first week of the month, this week is full of new information about the US economy in February. We saw on Monday that the manufacturing sector continued to expand with the ISM manufacturing index registering a 56.5 reading. While it was a slower pace of growth than in January, and lower than expectations, it’s still a strong reading and the employment index rose to 56.1, a good indication for hiring at the manufacturing level.

We will be getting plenty of employment based data this week, with the most important being the February payroll situation that is due out on Friday. The forecast is for a 75K to 100K drop in payrolls, though much of that drop will be due to the unusually harsh winter weather and record snowfall seen during the month. However, a sharp drop in February payrolls could come back as a big payroll gain in March. The unemployment rate is forecast to rise to 9.8% from 9.7% in January. On the employment front we will also get Wednesday ADP employment change, which measures private sector employment and the expectation is for a 50K drop following a 22K decline in January. Jobless claims which have been coming in worse than expected the past several weeks are forecast to drop down to 473K from 496K.

Here is a chart of non-farm payroll:

With the manufacturing side already released on Monday, Wednesday brings us the ISM services index which is expected to rise to 51.0 from 50.5. It’s been the manufacturing sector that has powered the recovery though consumer spending, as evident by Monday’s personal spending figures (a rise of 0.5% in January) shows that consumers can add more to 1^st quarter growth than expected. Of course how they react to another round of numbers showing job losses will affect spending. We will be getting more info on consumer spending in the form of total car sales in February, as well as the amount of credit taken out by consumers in January, though that figure is expected to show consumer paying back $4 billion worth of credit as opposed to taking new credit out.

The ISM Non-Manufacturing Index:

Finally on Thursday, we will have data on pending home sales which may garner more attention this week as sales of new and existing homes plummeted in January. Pending home sales are those in which contracts have been signed buy not yet closed and are a good indicator for future sales. It will give traders insights into whether the sharp slide in January in sales was a one-month problem of if housing is facing a double-dip downturn. Home sales are expected to rise 0.5%.