US Treasuries yields are slightly higher as European and Asian equities recovered overnight (FTSE +1.79%  NI225+.82%). Crude oil prices bounced higher as well on news that OPEC reached an agreement to cut production. In the US, the markets are digesting the release of jobs and wage data that were slightly below expectations. Nonfarm payrolls came in at 155k jobs compared to an expected 198k, which is a substantial slowdown, but also well above Fed estimates of sustainable job growth. Unemployment and participation rates held steady 3.7% and 62.9%, respectively, which was right in line with expectations. Lastly, wage data was weaker than expected MoM but the YoY change was in line with expectations and unchanged at 3.1%. In summary, the jobs data was good but has not matched the recent outstanding reports. It is interesting that Fed Chair Powell characterized the labor markets as “very strong” in a speech late last night as he had most likely already seen the data.

Chris Eckhoff
Associate, Investment Management Group


12/03Markit US Manufacturing PMI55.455.355.4
12/03Construction Spending MoM0.40%-0.10%0.00%
12/03ISM Manufacturing57.559.357.7
12/03ISM Employment58.456.8
12/03ISM Prices Paid7060.771.6
12/03ISM New Orders62.157.4
12/03Wards Total Vehicle Sales17.20m17.40m17.50m
12/05MBA Mortgage Applications2.00%5.50%
12/05U.S. Federal Reserve Releases Beige Book
12/05Beige Book Released Live Due to George H W Bush Funeral
12/06Challenger Job Cuts YoY51.50%153.60%
12/06ADP Employment Change195k179k227k
12/06Trade Balance-$55.0b-$55.5b-$54.0b
12/06Nonfarm Productivity2.30%2.30%2.20%
12/06Unit Labor Costs1.00%0.90%1.20%
12/06Initial Jobless Claims225k231k234k
12/06Continuing Claims1690k1631k1710k
12/06Bloomberg Consumer Comfort60.360.6
12/06Markit US Services PMI54.454.754.4
12/06Markit US Composite PMI54.754.4
12/06ISM Non-Manufacturing Index5960.760.3
12/06Factory Orders-2.00%-2.10%0.70%
12/06Factory Orders Ex Trans0.30%0.40%
12/06Durable Goods Orders-2.40%-4.30%-4.40%
12/06Durables Ex Transportation0.10%0.20%0.10%
12/06Cap Goods Orders Nondef Ex Air0.00%0.00%
12/06Cap Goods Ship Nondef Ex Air0.30%0.30%
12/06Household Change in Net Worth$2070b$2191b
12/07Change in Nonfarm Payrolls198k155k250k
12/07Two-Month Payroll Net Revision-12k
12/07Change in Private Payrolls198k161k246k
12/07Change in Manufact. Payrolls18k27k32k
12/07Unemployment Rate3.70%3.70%3.70%
12/07Underemployment Rate7.60%7.40%
12/07Average Hourly Earnings MoM0.30%0.20%0.20%
12/07Average Hourly Earnings YoY3.10%3.10%3.10%
12/07Average Weekly Hours All Employees34.534.434.5
12/07Labor Force Participation Rate62.90%62.90%62.90%
12/07Wholesale Inventories MoM0.70%0.70%
12/07Wholesale Trade Sales MoM0.20%
12/07U. of Mich. Sentiment9797.5
12/07U. of Mich. Current Conditions112.3
12/07U. of Mich. Expectations88.1
12/07U. of Mich. 1 Yr Inflation2.80%
12/07U. of Mich. 5-10 Yr Inflation2.60%
12/07Consumer Credit$15.000b$10.923b