Macro Economic Calendar: Week of February 3, 2025

Summary: Tariffs are the immediate driver of price action, but key employment data comes throughout the week with the S&P 500 near all-time highs.

Where to Focus

It was all about the Fed and PCE inflation last week; the start of February centers on jobs. Recall that the December NFP report was much stronger than what economists expected. 256,000 jobs were created in 2024’s final month while the unemployment rate ticked down to 4.09%. The good news was that Average Hourly Earnings came in light – at 3.9% YoY, it signaled modest inflationary pressures. 

That turned out to be a harbinger of in-line to even slightly dovish CPI, PPI, and PCE inflation numbers that were reported later in January. The labor market is of course critical, but most macro eyes are on tariffs right now. So, this week’s payrolls survey may be of lesser importance to others – odds of a March Fed rate change are low, but the May 7th FOMC meeting could be live. Throughout the week, tariff talk and actions will draw headline risk: Will there be delays? Exemptions? Added pressure on China? These are all possibilities with price impacts on stocks, bonds, commodities, and currencies.

Weekly Calendar Look Ahead

Before the big employment report on Friday, we’ll get a final read on S&P Global’s Manufacturing PMI on Monday morning, which is expected to confirm a very modest expansion, keeping up what appears to be a manufacturing rebound. That report comes just 15 minutes before the January ISM Manufacturing PMI figures. This version is forecast to reveal a modest contraction, but other macro clues will be found in the Prices Paid, Employment, and New Orders subindexes. Treasury auctions come later on Monday, and the Federal Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices (the SLOOS) is released Monday afternoon, so that could impact the Financials sector. In terms of Fedspeak, Bostin and Musalem have engagements in the afternoon and evening.

Tuesday begins the onslaught of jobs data. The JOLTS report verified hotter than estimates last time as a larger number of jobs opening surprised investors and caused a spike in rates. A dip is forecasted this go around, and we too expect some moderation. Factory Orders, another December data point, hit concurrently with JOLTS with more FOMC speakers later in the day.

ADP Private Payrolls arrives in the pre-market Wednesday; a steady 150,000 add is expected. Balance of Trade data before the bell shouldn’t hold many surprises since we already have the Q4 GDP numbers in the bag. Then, the Services PMIs come from both S&P Global and the ISM after the market opens. While Manufacturing has been tepid in recent quarters, the Services side of the economy has been firm. Once again, the sub-index components can certainly move the stock and bond markets, while impacting Fed Fund futures pricing. We will be interested to hear what Goolsbee, a Fed dove, and Bowman, a noted hawk, have to say given recent macro trends.

Challenger Jobs Cuts should be paltry when they hit the tape early on Thursday, and the same likely goes for Initial Jobless Claims. After last week’s decent Employment Cost Index numbers, we’ll get Q4 Nonfarm Productivity at 8:30 a.m. ET; a rise in Unit Labor Costs will likely ding productivity. Treasury auctions and another onslaught of Fed chatter occur in the afternoon.

Economists expect 170,000 jobs to have been created in January while the jobless rate is seen steady at 4.1%. YoY Average Hourly Earnings should stay on the retreat, dipping a tick to 3.8%. Later, the preliminary University of Michigan Surveys of Consumers crosses the wires – the 1-year and 5-year inflation expectations will be market-moving.

Overall, the 10-year Treasury rate may be the key this week. For now, it continues to hold the 4.5% mark, but a break below that would be a boon for stocks based on the inverse stock/bond correlation we’ve seen in recent months. Light job growth, low Prices Paid PMI data, and tame consumer sentiment would make that happen. 

Fiscal Policy Framework

President Trump’s cabinet nominees continue to stand before Congress in hopes of being appointed. Tulsi Gabbard, the would-be national intelligence director, is the biggest question mark; Polymarket has her confirmation chances at just 52%. RFK, Jr. Is likely to be confirmed as secretary of health and human services (76%), and the pick for FBI director, Kash Patel, has a very high chance of confirmation (95%). Also on Capitol Hill, the House Republicans held a retreat last weekend to hash out the budget, but they still may not have the votes to secure an easy path to enact the Trump agenda. As Speaker Johnson sweats it out, we’ll get the quarterly Treasury Refunding Announcement on Wednesday morning along with the Monthly Budget Statement that afternoon. 

Risks and Opportunities

Health Care stocks will be in play this week given a slew of pharma earnings and talk of tariffs on Europe. Solid profit reports from the likes of Eli Lilly (LLY), Novo Nordisk (NVO), and Pfizer (PFE), and a softer tone from President Trump toward Europe, could help the sector keep up its year-to-date alpha. With yields bouncing off key support last week and soft February seasonality, the broader market could come under pressure in the short run.

Quick Hits

• NVIDIA (NVDA) shares plunged last week following China’s DeepSeek developing a low-cost and open-source AI model, pressuring the Information Technology sector to a monthly loss (the only S&P 500 sector to decline last month)

• Communication Services led the market in January thanks to monster gains in Meta Platforms (META) and a strong showing from Alphabet (GOOGL)

• Oil prices are down close to 10% from their mid-January high, helping to cool inflation fears, but it’s also a sign of weak economic growth among the US’s major trading partners, namely those in the Euro Area

• The US dollar rallied last week, including a gain on Friday after tariffs on Canada and Mexico were announced

Resources used:

https://tradingeconomics.com/calendar

https://seekingalpha.com/news/4401505-catalyst-watch-tariff-drama-opec-alphabet-and-amazon-earnings-lennar-spinoff