Treasuries are selling off again this morning following another solid jobs report, and as has been the recent trend, stocks are also selling off in response to higher long-end yields (S&P 500 futures -21 points). The 10-year Treasury yield is now up to 2.83% (highest since January 2014), and the slope of the yield curve is 9 bps steeper over the last 24 hours (2yr/10yr spread). TIPS breakeven yields, which are a measure of market inflation expectations, are also back to 2014 levels.
Nonfarm payrolls added 200,000 jobs in January (20,000 more than expected), and the December payrolls figure was revised higher by 12,000 jobs. In the household survey, household employment grew by 409,000, and the official labor force expanded by 518,000. As such, the headline unemployment rate held at 4.1%. The biggest headline from today’s report was the wage data. Average hourly earnings rose 0.3% in January, and the December figure was revised higher to 0.4%. On a year-over-year basis, wages were up 2.9% in January (and December revised up 20 bps to 2.7%). If you were to point out a negative, it would be the fact that the average work week fell from 34.5 hours to 34.3 hours, but the earnings growth is the primary source of this morning’s move in Treasuries.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Surv(M) | Actual | Prior | Revised |
| 01/29 | Personal Income | 0.30% | 0.40% | 0.30% | — |
| 01/29 | Personal Spending | 0.40% | 0.40% | 0.60% | 0.80% |
| 01/29 | Real Personal Spending | 0.40% | 0.30% | 0.40% | 0.50% |
| 01/29 | PCE Deflator MoM | 0.10% | 0.10% | 0.20% | — |
| 01/29 | PCE Deflator YoY | 1.70% | 1.70% | 1.80% | — |
| 01/29 | PCE Core MoM | 0.20% | 0.20% | 0.10% | — |
| 01/29 | PCE Core YoY | 1.50% | 1.50% | 1.50% | — |
| 01/29 | Dallas Fed Manf. Activity | 25.4 | 33.4 | 29.7 | — |
| 01/30 | S&P CoreLogic CS 20-City NSA Index | — | 204.21 | 203.84 | 203.71 |
| 01/30 | S&P CoreLogic CS 20-City MoM SA | 0.60% | 0.75% | 0.70% | — |
| 01/30 | S&P CoreLogic CS 20-City YoY NSA | 6.30% | 6.41% | 6.38% | 6.32% |
| 01/30 | S&P CoreLogic CS US HPI NSA Index | — | 195.94 | 195.63 | 195.48 |
| 01/30 | S&P CoreLogic CS US HPI YoY NSA | — | 6.21% | 6.17% | 6.10% |
| 01/30 | Conf. Board Consumer Confidence | 123 | 125.4 | 122.1 | 123.1 |
| 01/30 | Conf. Board Present Situation | — | 155.3 | 156.6 | 156.5 |
| 01/30 | Conf. Board Expectations | — | 105.5 | 99.1 | 100.8 |
| 01/31 | MBA Mortgage Applications | — | -2.60% | 4.50% | — |
| 01/31 | ADP Employment Change | 185k | 234k | 250k | 242k |
| 01/31 | Employment Cost Index | 0.60% | 0.60% | 0.70% | — |
| 01/31 | Chicago Purchasing Manager | 64 | 65.7 | 67.6 | 67.8 |
| 01/31 | Pending Home Sales MoM | 0.50% | 0.50% | 0.20% | 0.30% |
| 01/31 | Pending Home Sales NSA YoY | 1.70% | -1.80% | 0.60% | — |
| 01/31 | FOMC Rate Decision (Upper Bound) | 1.50% | 1.50% | 1.50% | — |
| 01/31 | FOMC Rate Decision (Lower Bound) | 1.25% | 1.25% | 1.25% | — |
| 02/01 | Challenger Job Cuts YoY | — | -2.80% | -3.60% | — |
| 02/01 | Nonfarm Productivity | 0.70% | -0.10% | 3.00% | 2.70% |
| 02/01 | Unit Labor Costs | 0.90% | 2.00% | -0.20% | -0.10% |
| 02/01 | Initial Jobless Claims | 235k | 230k | 233k | 231k |
| 02/01 | Continuing Claims | 1929k | 1953k | 1937k | 1940k |
| 02/01 | Bloomberg Consumer Comfort | — | 54.6 | 53.7 | — |
| 02/01 | Markit US Manufacturing PMI | 55.5 | 55.5 | 55.5 | — |
| 02/01 | Construction Spending MoM | 0.40% | 0.70% | 0.80% | 0.60% |
| 02/01 | ISM Manufacturing | 58.6 | 59.1 | 59.7 | 59.3 |
| 02/01 | ISM Employment | — | 54.2 | 57 | 58.1 |
| 02/01 | ISM Prices Paid | 68.8 | 72.7 | 69 | 68.3 |
| 02/01 | ISM New Orders | — | 65.4 | 69.4 | 67.4 |
| 02/01 | Wards Domestic Vehicle Sales | 13.45m | 13.10m | 13.72m | — |
| 02/01 | Wards Total Vehicle Sales | 17.20m | 17.07m | 17.76m | — |
| 02/02 | Annual Revisions: Establishment Survey | ||||
| 02/02 | Change in Nonfarm Payrolls | 180k | 200k | 148k | 160k |
| 02/02 | Change in Private Payrolls | 181k | 196k | 146k | 166k |
| 02/02 | Change in Manufact. Payrolls | 20k | 15k | 25k | 21k |
| 02/02 | Unemployment Rate | 4.10% | 4.10% | 4.10% | — |
| 02/02 | Underemployment Rate | — | 8.20% | 8.10% | — |
| 02/02 | Average Hourly Earnings MoM | 0.20% | 0.30% | 0.30% | 0.40% |
| 02/02 | Average Hourly Earnings YoY | 2.60% | 2.90% | 2.50% | 2.70% |
| 02/02 | Average Weekly Hours All Employees | 34.5 | 34.3 | 34.5 | — |
| 02/02 | Labor Force Participation Rate | — | 62.70% | 62.70% | — |
| 02/02 | U. of Mich. Sentiment | 95 | — | 94.4 | — |
| 02/02 | U. of Mich. Current Conditions | — | — | 109.2 | — |
| 02/02 | U. of Mich. Expectations | — | — | 84.8 | — |
| 02/02 | U. of Mich. 1 Yr Inflation | — | — | 2.80% | — |
| 02/02 | U. of Mich. 5-10 Yr Inflation | — | — | 2.50% | — |
| 02/02 | Factory Orders | 1.50% | — | 1.30% | — |
| 02/02 | Factory Orders Ex Trans | — | — | 0.80% | — |
| 02/02 | Durable Goods Orders | — | — | 2.90% | — |
| 02/02 | Durables Ex Transportation | — | — | 0.60% | — |
| 02/02 | Cap Goods Orders Nondef Ex Air | — | — | -0.30% | — |
| 02/02 | Cap Goods Ship Nondef Ex Air | — | — | 0.60% | — |