Succinct Summation of Week’s Events 11.3.17

A succinct summation of the week’s key events:


1. October payrolls +261k, with much of the data skewed by Hurricanes. 51k person increase to September and +39k revision to August predate the storms. That odd +906k spike in September in the household survey regressed to was followed this month to a -484k.

2. Unemployment rate fell one tenth to 4.1%; however, the labor participation rate fell 4 tenths to 62.7%. I say throw it all away, and wait for next month’s.

3. We have a new Fed Chair nominee who seems experienced and qualified, narrowing avoiding a bunch of bums, sycophants and wannabes! Speaking of which: FOMC statement was a non event.

4. Oh, and we finally got a Tax Reform/Tax Cut bill from the House; We should expect the final version to be very different.

5. Personal income saw a 3.4% year over year gain in private sector wages. Q3 Employment Cost Index was higher by 0.7% q/o/q as expected and is vs 0.5% growth in Q2 and 0.8% in Q1.

6.Headline PCE gain was up 0.4% m/o/m and 1.6% y/o/y. The core rate was higher by 0.1% m/o/m and 1.3% y/o/y.

7. Initial jobless claims fell to 229k from 234k last week. Firings are at a very modest rate. Continuing claims fell by 15k to a fresh 44 year low.

8. Productivity in Q3 was a better than expected 3.0% q/o/q annualized vs the estimate of 2.6%. On a y/o/y basis it was higher by 1.5%.

9. ISM services index for October rose a touch to 60.1 from 59.8 but that was 1.6 pts above the estimate. It is also the best level since August 2005.



1. Investors Intelligence said Bulls rose 1.2 points to 63.5 — the highest in ~30 years. The last peak was at 65 in 1987. Bears fell to 14.4 from 15.1, lowest levels since May 2015. The spread between the two of 49.1, is just below the 1987 peak of 50.5.

2. Private sector construction in September fell m/o/m for the 3rd straight month. Nonresidential private construction was down for the 4th straight month and weaker for the 8th month in the past 9. It is lower by 3.8% y/o/y. Specifically, private commercial real estate construction fell for the 4th straight month. The CRE industry has peaked in this cycle.

3. Average 30 yr mortgage rate rose 4 bps m/o/m to 4.22%, the highest in 3 months and that drove refi applications down by 4.5%. It’s lower for the 6th week in the past 7 and sits at a 16 week low. It’s down by 38% y/o/y. Purchases fell .8% w/o/w after a 6.1% drop last week. They are still though up almost 10% y/o/y.

4. US savings rate in September fell a sharp 5 tenths to 3.1%, the lowest since December 2007. It’s averaged 5.2% over the past 25 years.

5. ISM manufacturing index for October was 58.7, slightly less than the forecast of 59.5 and down from 60.8 in September, the highest since 2004.


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