3 Numbers To Watch: German Unemployment, US ADP & Factory Orders

We continue the series of PMI numbers today as the finalised wurozone manufacturing numbers, plus UK construction, are scheduled for release.  We will also be treated to German labour market numbers. We then turn our atttention to the US and the ADP employment report, the traditional warm-up report ahead of Friday's 'nonfarm payrolls' employment report, and then factory orders.

April German Unemployment Change (07:55 GMT) to continue to improve: The locomotive of growth in the eurozone, Germany, may have shifted down in gears, but the union's largest economy remains a far more well-oiled machine than most of the other economies in the struggling euro bloc. In particular the German labour market has gone from strength to strength in spite of the debt crisis, with the unemployment rate down at 6.7%, the lowest print since the reunification, and consensus looks for further improvement in April. Though the rate is not expected to change, the number of unemployed is seen declining yet again, this time by 10k, and if we ignore a one-time blip in October when an extra 6k unemployed were registrered, the trend of fewer unemployed has been in place since June 2009.

April US ADP Employment Change (12:15) to show weaker, but still moderate job growth: The private sector has done a reasonable job of keeping the US economy afloat in recent quarters despite headwinds from both Asia and notably Europe. And this was indeed needed, as the public sector has lost 575k jobs since the end of the recession (in the same time span the private sector has added 2.89 million.) as state and local governments have struggled to correct the ship amid budget cuts. Consensus looks for another reasonably strong, if sequentially smaller, increase in the private sector of 170k in April down from 209k. This will, if realised, be the smallest increase in the private sector workforce since October's 142k.

March US Factory Orders (14:00) to drop on the back of weak Durable Goods Orders: Total factory orders, of which durables are roughly half, are seen down 1.7% m/m due to the sharp drop of 4.2% recorded in the (already released) Durable Goods Orders report, which was quite a bit worse than expectations of -1.7%. Hence consensus looks for nondurables to rise 0.4% on the month. The revisions contained in the Durable Goods Orders report also suggests a downward revision to February's Factory Orders gain of 1.3%.

Before these three reports, keep an eye out for PMIs from Europe, though most are finalised versions and hence not likely to change much.