Every US jobs report seems more critical than the last

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Friday sees the release of US the non-farm payrolls (NFP) report for September, potentially a major market-moving event.


While the NFP averaged a strong 876,000 per month through May to July, the resurgence of COVID-19 contributed to a significant slowdown in August to 235,000.


With COVID cases falling away sharply, the market is expecting September to have seen a re-acceleration to around 500,000.


Jobs growth is set to improve further in the coming months, given high-frequency data points to a decent uptick in economic activity such as in restaurant dining, travel and hotel stays, according to economists at ING, who are not the only ones expecting the US Federal Open Market Committee to announce at the 3 November meeting that tapering of its bond-buying will start from December onwards.


On the company results side, Electrocomponents PLC (LSE:ECM) ends the week with a trading update coming after an impressive 37% jump in revenue in the first quarter.


The distributor of industrial and electronics products continued to see good market share gains across its key regions, thanks to its product availability, strong service solution and digital offer compared to the smaller competition.


“We see this continuing, as management continues to invest in the business,” analysts at Peel Hunt said.


“However, the exit rate into the second quarter was not as strong, and management back in July was guiding to a slowdown in top-line growth in the balance of the year due to a combination of supply chain constraints reducing product availability and customer demand. We see no reason for this to have changed since then.”


“Despite the note of caution on the rest of the year, the signs of market share gains are clear, and the ongoing investment in the business gives us confidence in the long term outlook and we expect the momentum to continue.”


Significant announcements expected


Trading announcements: Electrocomponents PLC


Economic data: US non-farm payrolls, US unemployment rate

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