Donald Trump: Jobs market in focus as data dump set to give investors insight into election impact

Australian investors will feast on a smorgasbord of labour market data this week as they digest the ramifications of a second Donald Trump presidency for the global economy.

The Republican septuagenarian’s return to the White House has led to expectations inflation could heat up again in the US, given his promises to raise tariffs on imported goods and slash taxes.

That didn’t stop the Federal Reserve cutting interest rates for their second meeting in a row by 0.25 per cent on Thursday.

Chair Jerome Powell said the US election results would have no “near-term” impact on policy and questioned if he would step down if asked to do so by the president-elect, he bluntly responded “no”.

Mr Powell will give another indication of his thinking at a speech to the Dallas Regional Chamber later this week.

Even before Mr Trump has a chance to put his hands on the economic levers, core US inflation is expected to rise 0.3 per cent when the October consumer price index is released on Wednesday.

The Reserve Bank of Australia is still lagging its American counterpart, with no indication it is close to beginning its rate easing cycle.

Governor Michele Bullock told a Senate estimates hearing last week the US election had no impact on her inflation outlook and her recent remarks have signalled greater focus on domestic factors.

Speaking after the RBA board meeting on Tuesday, during which it held the cash rate at 4.35 per cent, she indicated ongoing strength in the labour market was creating upside risks in the inflation outlook.

“Survey measures continue to indicate labour availability is constrained, wages growth has continued to ease, but still generally above rates consistent with inflation targets given the weak productivity growth,” she said.

Wages growth is expected to slow to 3.6 per cent when the wage price index is released by the Australian Bureau of Statistics on Wednesday, due largely to a bumper 5.75 per cent increase in award wages dropping out of the data set, said Commsec chief economist Ryan Felsman.

The bureau’s labour force survey, to be released the following day, is expected to show an extra 20,000 jobs added to the Australian economy in October, with the unemployment rate edging from 4.1 per cent to 4.2 per cent, according to CBA economists.

They predict the participation rate to remain at a record 67.2 per cent.

An upside surprise to one or both readouts could reinforce the RBA’s hawkish tone.

CBA’s household spending insights report, alongside consumer and business confidence surveys by Westpac and NAB on Tuesday, will provide a further insights.

Investors on Wall Street have been willing, with the S&P 500 briefly surpassing the 6000 mark and closing Friday with the biggest weekly percentage gain in a year as the Trump win and a possible Republican Party sweep in Congress fuel expectations.

The Dow Jones Industrial Average rose 259.65 points, or 0.59 per cent, to 43,988.99, the S&P gained 22.44 points, or 0.38 per cent, to 5,995.54 and the Nasdaq Composite gained 17.32 points, or 0.09 per cent, to 19,286.78.

Australian futures have meanwhile taken a 36-point, or 0.43 per cent, tumble to 13,388.

However the main local indices climbed for a third consecutive day on Friday on hopes of stimulus from Beijing and Federal Reserve caution when queried on the inflationary outlook under a second Trump presidency.

The S&P/ASX 200 closed 68.8 points, or 0.8 per cent, higher at 8295.1, while the broader All Ordinaries gained 38 points, or 0.8 per cent, to 8552.6.