3 Numbers To Watch: French Ind. Prod., US NFIB Index And US JOLTS

The case for optimism on the outlook for the Eurozone’s nascent economic recovery will be in the crosshairs again today with the July update on industrial production for France. Later, two widely followed economic releases for the US are scheduled: the NFIB Small Business Optimism Index and the Job Openings and Labor Turnover Survey.

France Industrial Production (06:45 GMT) A number of recent economic updates suggest that the Eurozone is finally pulling free of recession. Last week’s encouraging report on exports, for instance, is considered a sign of things to come. "Everything is pointing to a recovery," says a Goldman Sachs economist. "We do have some divergence between countries, but the upswing is helping everyone to benefit."

The optimistic view will be tested again with today’s release on France’s industrial production for July. The numbers on this front in recent months still raise questions about when, or if, Europe’s second-largest economy will join the recovery party. In fact, without some degree of improvement in the big picture for France, it’s debatable if a meaningful rebound can even take root in the Eurozone. Industrial production alone is hardly the last word on the economic trend but it captures a large slice of national output and so it’s always on the short list of macro indicators to watch. With that in mind, the market will be interested in learning if the disappointing trend of late will reverse course in the July profile. Several economists think we’ll see exactly that in today’s report, with industrial output climbing on a monthly basis for the first time since April. But if the predictions are wrong and we see another round of red ink today, that would be a forceful reminder that it’s still best to reserve judgment about the timing and strength for Europe’s so-called recovery.

US NFIB Small Business Optimism Index (11:30 GMT) Sentiment in the small business sector continues to improve, but at a sluggish pace, according to this widely followed benchmark from the National Federation of Independent Business (NFIB). Indeed, last month’s update (pdf) shows that the overall mood among small firms, although rising, has yet to mount a meaningful revival from the depths of 2008, when the Great Recession was in full swing.

But even a slow rebound is better than nothing. Small firms drive a large if not dominant share of jobs creation and so maintaining a positive outlook on the US economy is closely linked with the ongoing improvement in sentiment for these companies. The good news is that economists think we’ll see another step in the right direction in today’s update for August. The consensus forecast sees the NFIB Small Business Optimism Index rising to 95.0, or up a bit from 94.1 in the previous month. That would hardly be a game changer, but if the forecast is accurate it will be impressive once you consider that gains for small business employment have been slipping in recent months, according to last week’s ADP Employment Report. If today’s NFIB index can inch higher, there’s still hope that small firms will create jobs at a faster rate in the months ahead.

US Job Openings and Labor Turnover Survey (14:00 GMT) Last week’s shaky jobs report for August has the crowd wondering if employment growth is destined to soften in the remaining months of 2013. In search of deeper perspective on the trend, today’s update of the Job Openings and Labor Turnover Survey (JOLTS) will be closely analysed.

One potentially troubling sign is the recent stagnation in the number of job openings, which totaled 3.9 million in the June report - roughly unchanged from May. Some analysts explain that the labour market’s profile has changed in recent years (courtesy of the Great Recession) and so the standards for defining a healthy pace of new jobs is different these days. The change isn’t necessarily for the better and so what looks like a slow recovery in job openings by the recoveries of yesteryear is now considered a respectable if unimpressive performance.

In any case, today’s JOLTS release is expected to show July’s job openings at around 3.9 million, or unchanged from June’s level. In turn, a “hires rate” that’s treading water suggests that the modest increases in payrolls may be with us for some time to come.