Yesterday we gained an early indication of how Friday’s US employment report could perform in the form of the ADP employment report. In addition, the heavily watched UK PMI Service sector data was released, a sector which contributes to roughly 80% of UK growth.
Firstly, services PMI narrowly missed economists’ consensus, posting a figure of 57.4, a number in line with this year’s strong average rate. Hiring last month eased to its slowest pace since March 2014, which therefore drove tertiary sector performance lower. The worse than expected number combined with manufacturing and construction PMI’s released this week, points to a slightly lower GDP of 0.6% this quarter. The high tier data will give Bank of England members plenty to discuss ahead of tomorrow’s many announcements.
US ADP employment report showed a job increase of just 185k in July, short of market expectations. The ADP figures is posted ahead of the US Labour Department’s more comprehensive non-farm payrolls released this Friday where 220k figure is forecast. The bearish ADP has added speculation that this Friday’s all important number maybe south of the 200k mark.
We have a barrage of information released from the Bank of England this Thursday. The BoE’s new and improved policy process is set to coincide with re-emerging fissures in the UK monetary policy debate. Both the inflation report and minutes are released, with the latter being the immediate focus as it seems likely to show three members voting in favour of a rate rise. However, we will gain further insight into the inflation report and Carney’s press conference which follows shortly after.