• Manufacturing PMI expected to dip to 56.5 in December from 57.5.
  • New Orders Index forecast to jump to 74.8.
  • Employment Index to climb to 50.7 from 48.4.
  • Dollar could receive a boost in the first major statistic of the New Year.

Can the US recovery continue as COVID-19 cases reach new levels? The question has not changed since diagnoses began to rise the fall.

Judging from the manufacturing sector where the Purchasing Managers' Index from the Institute for Supply Management (ISM) has been in expansion for six months and is expected to add a seventh in December, the answer is yes. The run from June has been the best half-year since the first six months of 2019.

Manufactruing PMI

The New Orders Index jumped from 31.8 in May to 56.4 in June and has not been below 60 since then. The forecast of 74.8 for December is astonishing. If accurate it would be the second highest score for expected business in the 70 odd years of the survey.

New Orders Index

Employment has lagged the other indexes throughout the recovery. It only reached the 50 expansion-contraction mark in October at 53.2 after 14 straight negative months. Then dropped back to 48.4 in November. It is projected to rise to 50.7 in December.

Initial Jobless Claims and Payrolls

Claims have had a jumpy two months as reverting lockdowns in California and restaurant restrictions in New York and elsewhere have pushed people back onto the unemployment rolls.

First time claims rose from a pandemic low of 711,000 in the week of November 6 to 787,000 two weeks later, fell back to 716,000 the following week, jumped back to 892,000 two weeks after that on December 11 and were 787,000 in the final period of the year.

Initial Jobless Claims

 

Continuing Claims have more stable with the last rise in the November 27 week and the latest reporting on December 18 at 5.219 million, the lowest of the pandemic era.,

Nonfarm Payrolls have weakened considerably in November falling to 245,000, less than half the 641,000 average of the prior two months. The December gain, to be released this Friday, is expected to be just 100,000. The unemployment rate is forecast to rise 0.1% to 6.8%. It would be the first increase since April.

Conclusion and the dollar

Manufacturing executives are looking and planning for the end of the pandemic sometime in the spring or early summer. Despite the gloom in the labor market that expectation should continue to keep the factory outlook optimistic.

The US dollar had a miserable December, losing ground in every major pair. Trends in December, especially in the liquidity-starved final two weeks, tend to exaggeration.

A strong December manufacturing ISM, ignoring the current COVID-19 diagnoses, could be just the tonic the greenback needs.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

A bearish Double Distribution day could bring more offers to the asset. A golden cross, represented by 50- and 200-period EMAs advocates the antipodean. Aussie bulls may find a responsive buying action at the lower boundary of the Rising Channel.

AUD/USD News

EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

The EUR/USD pair has witnessed a minor fall after breaching the early Asian session’s consolidation formed in a narrow range of 1.0579-1.0588 as the risk-off impulse rebounded. The asset has slipped to near 1.0550 and is expected to remain uncertain.

EUR/USD News

Gold bulls recapture 200-DMA, more gains likely? Premium

Gold bulls recapture 200-DMA, more gains likely?

Gold Price is headed for the first weekly gain in five weeks this Friday, despite posting small losses, in the wake of a sharp rebound in the US dollar. The dollar recovers its ground even though risk sentiment remains in a fairly better spot, with the S&P 500 futures up 0.65% on the day. 

Gold News

How to trade the next 20% upswing in Binance Coin price

How to trade the next 20% upswing in Binance Coin price

Binance Coin price is on a recovery rally and shows promise of a further uptrend. Adding credence to this run-up is the price inefficiency that is likely to propel BNB higher. Binance Coin price crashed to $205 on May 13 as the crypto markets crumbled due to the LUNA-UST debacle.

Read more

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla's stock slips as it is kicked out of the S&P 500 ESG index. Elon Musk reacts aggressively, calling it a scam. Growth fears dominated and weighed on the overall market mood, leading to a negative close on major Wall Street indices. 

Read more

Majors

Cryptocurrencies

Signatures