Data on Manufacturing, Jobs May Be Sobering

Investors pinning their hopes on an economic recovery by the middle of 2002 could get a dose of reality about the near-term outlook from upcoming economic statistics, including Friday’s key U.S. jobs data and a closely watched U.S. manufacturing sector report due today.

“We’ve got an enormous amount of economic data coming out, and I think it’s going to prove to be a little disappointing,” said Jeff Kleintop, chief investment strategist for PNC Advisors. “The market has gotten a little bit ahead of itself in anticipating this sharp economic rebound, which I don’t think is going to happen until mid-next year.”

Weekend events overseas will probably only further dampen Wall Street’s mood when the market reopens, as tensions grow in the Middle East and as Argentina’s economic woes deepen.

Investors are worried that growing unemployment could put an economic rebound in jeopardy if it prompts consumers to curb their spending. For that reason, Friday’s monthly U.S. nonfarm payrolls report will be among the week’s most eagerly anticipated data.

Economists in a Reuters survey predicted U.S. payrolls shrank by just 189,000 in November, after a massive drop of 415,000 in October. But they also said the unemployment rate would tick up to 5.6% in November from 5.4% in October.