Rising fuel costs from the Iran war drive much of the inflation facing households and businesses
A dense stretch of economic reporting begins Monday, filling the calendar with updates on the jobs market, the broader economy and corporate profits just as Americans head to the polls for the Nov. 3 midterm elections that could reshape Congress as inflation continues squeezing households.
The jobs market has remained a relatively resilient part of the economy even as stubbornly hot inflation burns household budgets, but it now shows signs of stress as job growth stagnates. On Tuesday, the Labor Department will release its Job Openings and Labor Turnover Survey for September, detailing job openings and layoffs across a wide range of sectors, including healthcare, retail and manufacturing. Job openings have held in a relatively stable range throughout the year, and economists expect the most recent report to show a slight rise.
The weekly update on unemployment claims, a proxy for layoffs, follows Thursday. The closely watched monthly employment report arrives Friday and will detail hiring by employers during October across a range of industries and sectors. Economists expect little change from September’s disappointing update, and revisions have shaved more jobs from prior monthly reports.
The weaker employment picture adds worries to an economy already under pressure from inflation, and it complicates the Federal Reserve’s task. The central bank is expected to raise its benchmark interest rate again before the year ends in an effort to cool inflation. It also carries a mandate of seeking maximum employment — and the higher rates that slow economic growth tend to hurt the jobs market.
Monthly reports from the Institute for Supply Management have shown the overall economy expanding, and the trend of slight growth is expected to have continued in October. The manufacturing report is due Monday, while the report on the more economically influential services sector follows Wednesday.
The surveys also include commentary from businesses on the conditions they face, and higher costs have dominated those concerns. Many businesses are facing more stress over operations and planning because of inflation driven by an erratic U.S. trade conflict with much of the world and by the surging price of oil driven by the U.S. war with Iran. The trade conflict has increased costs for a wide range of materials while making it difficult for businesses to plan ahead amid constantly shifting U.S. trade policy.
The war with Iran has been ongoing since February and has essentially shut down the vital Strait of Hormuz, stifling global oil shipments. That has fueled a leap in gas prices, making shipping more expensive for everything from food to clothing. Rising fuel costs are the main driver of much of the inflation facing households and businesses.
Corporate earnings will add more detail to the bigger economic picture, offering further insight into inflation impacts and AI prospects. Companies focused on travel, technology and clothing are set to report profits for their most recent quarter and provide forecasts for the rest of the year and beyond. Nearly half of the companies in the S&P 500 have already reported their latest financial results, and Wall Street is currently expecting profits to rise by 30% overall. The benchmark index stood at 7,743.98 as of Oct. 31, according to FRED, the economic database maintained by the Federal Reserve Bank of St. Louis.
Clorox, the maker of bleach and other household staples, reports Monday. Big Tech companies Advanced Micro Devices and Super Micro Computer report Tuesday, along with online travel company Booking Holdings. Rival Expedia follows Wednesday, and clothing and accessories makers Tapestry and Ralph Lauren close the week Thursday.