Reports on Job Market, Manufacturing Expected

As quarterly corporate earnings season winds down, the spotlight will shift to government data this week as investors scrutinize reports for signs of improvement in the job market and other evidence of economic strengthening.

Peter Cardillo, chief strategist at Global Partners Securities Inc., said the most important data would be the October employment report, due Friday from the Labor Department.

“If we should see nonfarm [payrolls] move up by 50,000 or 60,000, that would be one more piece of solid information that would support economic growth of about 4% to 4.5% over the next several quarters,” he said.

Investors want to see if nonfarm payrolls can get better two months in a row after September’s net gain of 57,000 jobs, which was the first increase since January.

Economists polled by Reuters predict that U.S. nonfarm payrolls added a net 55,000 jobs in October, while they see the unemployment rate at 6.1%, steady with September.

The week will kick off with a report on the manufacturing sector today from the Institute of Supply Management. That will be followed up with ISM’s report on the nonmanufacturing, or services, sector on Wednesday.

“I think they’ll be pretty strong,” said Alfred Kugel, senior investment strategist at Stein Roe Investment Counsel. “I think the [ISM reports] are going to be good because we already know there’s good momentum in the economy and I think the surveys will pick that up.

Meanwhile, the corporate earnings machine slips into a slower gear after two heavy weeks of reports. But investors still will be sifting through more results, including those from computer networking giant Cisco Systems Inc., which is expected to report quarterly earnings Wednesday.