US Employment Expansion Expected to Slow Following Strong January

Global Economic Outlook: Key Highlights for the Week

US Labor Market and Economic Indicators

After a surge in hiring at the start of the year, job growth in the United States is expected to have slowed in February, returning to a more moderate and sustainable pace. Economists anticipate that 60,000 new positions were created last month, less than half of January’s total, according to a Bloomberg survey. The unemployment rate is projected to remain steady at 4.3%.

Following several years of aggressive recruitment, US employers sharply reduced hiring in 2025, resulting in the weakest payroll expansion outside of a recession since 2003. This slowdown has heightened concerns among consumers, who have been the main driver of economic growth.

If the labor market continues to stagnate, consumer confidence and spending could be further tested. January’s retail sales figures, which will be released alongside the jobs report, may not provide clear direction due to widespread disruptions from severe winter storms.

Analysts expect a slight uptick in retail sales, excluding autos and gasoline. Fuel prices hit a five-year low earlier in January before rebounding, while auto sales declined, likely impacted by the harsh weather.

Insights from Bloomberg Economics

Bloomberg Economics forecasts a decrease of 30,000 jobs in February, a significant slowdown from January’s robust numbers. This drop is attributed more to adverse weather conditions than to underlying weakness in hiring. Sectors sensitive to weather, such as construction and hospitality, were particularly affected. Overall, labor market conditions appear to have stabilized since last autumn.

—Anna Wong, Stuart Paul, Eliza Winger, Chris G. Collins, Alex Tanzi, and Troy Durie, Bloomberg economists.

In addition to employment and retail data, economists will analyze upcoming manufacturing and services surveys for insights into business sentiment. The Institute for Supply Management will release its manufacturing index on Monday, followed by the services index on Wednesday.

The Federal Reserve’s Beige Book, providing anecdotal reports on economic conditions nationwide, will be published on Wednesday.

Canada: Economic Stability and Trade Initiatives

Canadian policymakers will assess economic risks in a volatile global environment. Bank of Canada Governor Tiff Macklem will address financial stability, while Deputy Governor Sharon Kozicki will discuss potential adjustments to the monetary policy framework.

Markets will also review productivity data for signs of continued improvement. Prime Minister Mark Carney is set to visit India, Australia, and Japan to strengthen trade ties.

Global Economic Developments

This week features a range of inflation reports from the eurozone, Turkey, South Korea, and Chile, as well as several economic activity indexes. China’s National People’s Congress will also be a focal point, alongside ongoing attention to the aftermath of joint US-Israeli actions in Iran.

• For more, read Bloomberg Economics’ full Week Ahead for the US
• Follow our live blog on Iran

For a summary of last week’s events and a preview of what’s ahead in the global economy, see below.

Asia: Trade, Inflation, and Central Bank Moves

South Korea’s latest export data showed increased momentum in February, supporting the central bank’s view that strong semiconductor demand is helping stabilize the economy.

Australia is set to release fourth-quarter growth figures on Wednesday, which are expected to show a slight improvement and may fuel speculation about another rate hike by the Reserve Bank of Australia, especially after January inflation remained above target.

China will publish PMI data on the same day, likely highlighting the need for additional policy support following a sluggish start to the year. The National People’s Congress, beginning Thursday, will outline economic priorities for the coming year.

• Read More: China’s Policy Summit Puts Tech, Stimulus in Focus for Investors

Official manufacturing and non-manufacturing indexes for February are expected to remain in contraction, though alternative indexes have been somewhat more optimistic. Other Asian countries releasing PMI data this week include Indonesia, Malaysia, the Philippines, Thailand, Singapore, South Korea, Taiwan, and Vietnam.

Japan’s Ministry of Finance will release corporate earnings data on Tuesday, providing insight into the potential for continued wage growth and capital investment. These figures will be incorporated into revised GDP data due March 9.

South Korea’s inflation rate is forecast to edge up to 2.2% in February, likely prompting the Bank of Korea to maintain its current policy stance. Indonesia’s inflation is expected to accelerate to 4.34%, which could challenge the central bank’s accommodative approach. Thailand, the Philippines, and Vietnam will also report CPI figures, while trade data are due from Vietnam, Australia, Indonesia, and Pakistan.

Three Reserve Bank of Australia officials are scheduled to speak this week, potentially offering hints about the timing of the next rate increase. The overnight-indexed swaps market currently suggests only a slim chance of consecutive hikes at the next meeting on March 17.

Assistant Governor Sarah Hunter will address the Norges Bank Conference in Oslo on Monday. On Tuesday, Governor Michele Bullock will speak at the AFR Business Summit in Sydney, and Deputy Governor Andrew Hauser will participate in a panel in New York later in the week. Malaysia’s central bank is expected to keep its policy rate unchanged at 2.75% on Thursday.

• For more, read Bloomberg Economics’ full Week Ahead for Asia

Europe, Middle East, and Africa: Inflation and Policy Updates

This week is pivotal for inflation data in the region. After mixed results from major eurozone economies, overall annual consumer price growth is expected to remain at 1.7% in February, matching the previous month’s lowest level since September 2024.

Italy’s inflation rate, released alongside eurozone data on Tuesday, is projected to rise slightly to 1.1%.

Additional eurozone releases include industrial production figures from France and Spain on Thursday, offering early insights into manufacturing trends for the year. German factory orders, due Friday, may reveal whether government stimulus is boosting Europe’s largest economy.

European Central Bank President Christine Lagarde is scheduled to speak on Monday and Thursday, with Executive Board member Isabel Schnabel addressing an audience in New York at week’s end.

Bundesbank President Joachim Nagel commented on Sunday that the eurozone’s inflation outlook is generally positive and that monetary policy is well-positioned.

Potential sovereign credit rating reviews for France and Portugal by Fitch Ratings are expected after markets close on Friday.

In the UK, Chancellor Rachel Reeves will deliver the Spring Forecast on Tuesday. While expectations are subdued, political uncertainty surrounding Prime Minister Keir Starmer could draw attention to fiscal policy implications.

Sweden’s CPIF inflation measure may have dropped to 1.8% in February, its lowest since 2024, with core inflation likely falling short of central bank forecasts due to a stronger currency. These figures are due Thursday.

Switzerland will release inflation data on Wednesday, with most analysts expecting either flat prices or outright annual declines. Swiss National Bank President Martin Schlegel has acknowledged the possibility of negative inflation readings, emphasizing that such outcomes are not problematic.

In Eastern Europe, Hungary’s fourth-quarter GDP data on Tuesday will indicate whether the pre-election economic boost anticipated by Prime Minister Viktor Orban has materialized. Romania is expected to present a draft budget for 2026.

Poland’s central bank may resume interest rate cuts on Wednesday, as inflation is forecast to remain low. In Turkey, inflation data on Tuesday may show an increase to 31.5%, mainly driven by food prices, with further rate cuts anticipated but at a slower pace than January’s 100 basis-point reduction.

• For more, read Bloomberg Economics’ full Week Ahead for EMEA

Latin America: Economic Growth and Inflation Trends

Chile will release January GDP-proxy data on Monday, likely supported by strong domestic demand, near-record copper prices, and optimism about pro-market policies from President-elect Jose Antonio Kast.

Later in the week, Chile’s February inflation is expected to cool from January’s 0.4% monthly increase, bringing the annual rate to around 2.5%—the slowest since August 2020.

Uruguay’s central bank will meet on Tuesday after a 100 basis-point rate cut in January, with inflation readings showing a three-month slowdown to 3.46%, below target.

Brazil’s main focus is on fourth-quarter and final 2025 GDP results, which are expected to highlight the impact of tight monetary policy on Latin America’s largest economy. Year-over-year growth is likely to fall just below the third quarter’s 1.8%, with full-year 2025 growth estimated at 2.3%, down from 3.4% in 2024—the lowest since the pandemic-induced contraction in 2020.

Brazil will also report industrial production and the national unemployment rate, which reached a record low of 5.1% in December.

Colombia’s inflation rate is expected to have edged higher from January’s 5.35%. A 23% minimum wage increase, briefly suspended by the high court in February and reinstated by decree, has created significant uncertainty for analysts and businesses.

• For more, read Bloomberg Economics’ full Week Ahead for Latin America

Additional Resources

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