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Focus on Fed and jobs this week

By Sheyna Steiner · Bankrate.com
Monday, April 2, 2012
Posted: 12 pm ET

Going into Easter and Passover, the economic calendar this week is fairly light, but at least one very significant report will be coming out: nonfarm payrolls and the headline unemployment rate will be released on Friday.

This morning, the Institute for Supply Management's manufacturing report showed the sector expanding in March, up 1 percent from February to 53.4 percent. A reading above 50 indicates that the manufacturing economy is expanding while a reading under 50 indicates contraction.

On Tuesday at 2 p.m., the minutes from the last meeting of the Federal Open Market Committee on March 13 will be released. The minutes will likely garner a lot of attention as everyone attempts to gauge what the Fed really thought of the economy last month and the likelihood of more bond buying, also known as QE3, for a third possible go-round with quantitative easing.

Nonfarm payrolls

The March employment numbers could attract more attention than usual, if you can believe it, as a result of a speech given by Federal Reserve chairman Ben Bernanke on March 26.

In the speech at the National Association for Business Economics Annual Conference in Washington, Bernanke addressed recent developments in the labor market. Though he expressed enthusiasm for the improvements, he tempered his remarks by noting that the reasons for the drop in unemployment since September were not yet obvious. Also unclear was the prognosis for the downward trend.

Will it last? Who knows, but this week's payroll report could provide clues as to the direction taken by the FOMC later this month when they meet to discuss monetary policy and interest rates on April 25.

Signs of improvement will put the likelihood of more quantitative easing lower, but anything else could hint at more easing.

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