The look ahead: US, European employment reports; Australian interest rates

Several reports due out in the coming week will gauge whether the employment scenario continues to improve in the US.

On May 4, the US Bureau of Labor Statistics will release its monthly Employment Situation Report. The US unemployment rate fell slightly to a three-year low of 8.2% in March.

The report will follow the release of several other jobs reports due out in the coming week. The ADP Employment Report, for example, comes out May 2nd. Last month, it showed that nonfarm employment grew by 209,000 during March – the best March in four years. Also on May 2nd, outplacement firm Challenger, Gray & Christmas will issue its job cut report. Planned job cuts declined in March to the lowest level since May 2011, the firm reported last month.

On May 3rd, the US Department of Labor will issue its weekly update on unemployment claims by first-time filers. On May 4th, the US Monster Employment Index will provide its monthly analysis of online job recruitment.

European economy

Economists and investors will continue to monitor Europe’s shaky economy in the coming week, following signs of sluggishness.

“Euro-zone economic momentum is weakening, and [it] is going to be more difficult for governments to reach fiscal targets in a weak growth environment,” Emmanuel Cau, a strategist at JPMorgan told Reuters on Tuesday.

On Monday, the European Central Bank will offer an overview of economic and financial developments in the euro zone when it releases the three-month average of the annual growth rate for M3 money supply. M3 is the ECB’s broadest measure of money supply and an indicator for inflation and the possibility of interest rate increases.

The annual M3 growth rate was 2.8% in February, up from 2.5% in January. The three-month average of the annual growth rates of M3 in the period from December to February was 2.3%, up from 2.0% during the period from November 2011 to January 2012. The latest results will be released on the ECB website.

On Wednesday, the European Commission will release unemployment figures. The euro zone’s unemployment rate has been climbing slowly since mid-2009, reaching a record high 10.8% in February.

Australian interest rates

Traders project that the Reserve Bank of Australia will lower its benchmark interest rate 25 basis points Tuesday. The rate has been at 4.25% since December 2011, but data showed consumer price inflation slowed in the first quarter.

Growth in the Australian economy has been sluggish, slowing in the fourth quarter. Australia’s central bank has already indicated that there’s room to cut the key policy interest rate if consumers become more cautious and demand weakens further, according to Bloomberg.

The rate determines the interest that financial institutions pay when they borrow from the central bank. Changes in the rate affect interest rates set by commercial banks and other institutions for their savers and borrowers as well as the price of bonds and shares and the exchange rate. Changes can also affect spending in the economy.