Treasuries are little changed following the release of the November jobs report. This initial reaction has been more positive in equity markets (S&P 500 futures +7.5 points), and fixed income investors appear to be reacting to the weaker than expected wage data. Nonfarm payrolls added 228,000 jobs in November, 33,000 more than expected but offset somewhat by a 17,000 downward revision to October. The headline unemployment rate held unchanged at 4.1% (5 bps higher if rounding to 3 decimals), and the labor participation rate was unchanged as well.

Nonfarm payrolls growth has been robust for several years, but for much of 2017, investors have been more focused on the wage growth trend, which has generally been a disappointment in the eyes of most market participants. Average hourly earnings rose 0.2% in November versus expectations of a 0.3% gain, and wages were up 2.5% on a year-over-year basis versus 2.7% expected. On the surface, this another miss for a closely-watched category, but it was partly reflective of downward revisions to prior months. The overall inflation trend remains below the Fed’s target, but they have made it very clear in recent months that inflation (wages included) is high enough to continue with policy normalization.

Jason Haley
Managing Director, Investment Management Group

Date TimeEventSurveyActualPriorRevised
12/08/2017 Change in Nonfarm Payrolls195k228k261k244k
12/08/2017 Two-Month Payroll Net Revision3k
12/08/2017 Change in Private Payrolls195k221k252k247k
12/08/2017 Change in Manufact. Payrolls15k31k24k23k
12/08/2017 Unemployment Rate4.10%4.10%4.10%
12/08/2017 Average Hourly Earnings MoM0.30%0.20%0.00%-0.10%
12/08/2017 Average Hourly Earnings YoY2.70%2.50%2.40%2.30%
12/08/2017 Average Weekly Hours All Employees34.434.534.4
12/08/2017 Labor Force Participation Rate62.70%62.70%
12/08/2017 Underemployment Rate8.00%7.90%
12/08/2017 Wholesale Inventories MoM-0.40%-0.40%
12/08/2017 Wholesale Trade Sales MoM0.30%1.30%
12/08/2017 U. of Mich. Sentiment9998.5
12/08/2017 U. of Mich. Current Conditions114.3113.5
12/08/2017 U. of Mich. Expectations90.588.9
12/08/2017 U. of Mich. 1 Yr Inflation2.50%
12/08/2017 U. of Mich. 5-10 Yr Inflation2.40%
12/11/2017JOLTS Job Openings6093
12/12/2017NFIB Small Business Optimism104103.8
12/12/2017PPI Final Demand MoM0.40%0.40%
12/12/2017PPI Ex Food and Energy MoM0.20%0.40%
12/12/2017PPI Ex Food, Energy, Trade MoM0.20%0.20%
12/12/2017PPI Final Demand YoY3.00%2.80%
12/12/2017PPI Ex Food and Energy YoY2.40%2.40%
12/12/2017PPI Ex Food, Energy, Trade YoY2.30%
12/12/2017Monthly Budget Statement-$135.0b-$63.2b
12/13/2017MBA Mortgage Applications4.70%
12/13/2017CPI MoM0.40%0.10%
12/13/2017CPI Ex Food and Energy MoM0.20%0.20%
12/13/2017CPI YoY2.20%2.00%
12/13/2017CPI Ex Food and Energy YoY1.80%1.80%
12/13/2017CPI Core Index SA253.961253.428
12/13/2017CPI Index NSA246.797246.663
12/13/2017Real Avg Weekly Earnings YoY0.40%0.30%
12/13/2017Real Avg Hourly Earning YoY0.40%0.20%
12/13/2017FOMC Rate Decision (Upper Bound)1.50%1.25%
12/13/2017FOMC Rate Decision (Lower Bound)1.25%1.00%
12/14/2017Initial Jobless Claims239k236k
12/14/2017Continuing Claims1908k
12/14/2017Retail Sales Advance MoM0.30%0.20%
12/14/2017Retail Sales Ex Auto MoM0.70%0.10%
12/14/2017Retail Sales Ex Auto and Gas0.30%0.30%
12/14/2017Retail Sales Control Group0.30%0.30%
12/14/2017Import Price Index MoM0.80%0.20%
12/14/2017Import Price Index ex Petroleum MoM0.10%0.10%
12/14/2017Import Price Index YoY2.50%
12/14/2017Export Price Index MoM0.30%0.00%
12/14/2017Export Price Index YoY2.70%
12/14/2017Markit US Manufacturing PMI5453.9
12/14/2017Markit US Services PMI54.5
12/14/2017Markit US Composite PMI54.5
12/14/2017Bloomberg Consumer Comfort52.3
12/14/2017Business Inventories-0.10%0.00%
12/15/2017Empire Manufacturing1819.4
12/15/2017Bloomberg Dec. United States Economic Survey
12/15/2017Industrial Production MoM0.30%0.90%
12/15/2017Capacity Utilization77.20%77.00%
12/15/2017Manufacturing (SIC) Production0.20%1.30%
12/15/2017Total Net TIC Flows-$51.3b
12/15/2017Net Long-term TIC Flows$80.9b