January 7, 2022 Headlines

The December employment report provided further evidence of a tight labor market. Growth in nonfarm payrolls missed versus expectations (199k vs. 450k), but wage growth surpassed expectations and the headline unemployment rate fell to 3.9%. The latter further feeds the hawkish monetary policy speculation, and as such, Treasury yields are leaking higher again following the release of the report. It’s been a rough start to the year for fixed income. Term Treasury yields are up 15-25 basis points (bps) this week, and the 21 bps increase in the 5-year note yield in the first 4 days of the week was the steepest increase to start the year in nearly 20 years. The carnage has seeped in mortgage pricing as well, with the Fannie Mae 30-year par-coupon MBS rate rising 30 bps this week to 2.36%.  

Jason Haley
Chief Investment Officer

01/03/22Markit US Manufacturing PMI57.757.757.8
01/03/22Construction Spending MoM0.60%0.40%0.20%0.40%
01/04/22ISM Manufacturing6058.761.1
01/04/22ISM Prices Paid79.368.282.4
01/04/22ISM New Orders60.460.461.5
01/04/22ISM Employment53.654.253.3
01/04/22JOLTS Job Openings11079k10562k11033k11091k
01/04/22Wards Total Vehicle Sales13.10m12.44m12.86m
01/05/22MBA Mortgage Applications-5.60%3.20%
01/05/22ADP Employment Change410k807k534k505k
01/05/22Markit US Services PMI57.557.657.5
01/05/22Markit US Composite PMI5756.9
01/05/22FOMC Meeting Minutes
01/06/22Challenger Job Cuts YoY-75.30%-77.00%
01/06/22Trade Balance-$81.0b-$80.2b-$67.1b-$67.2b
01/06/22Initial Jobless Claims195k207k198k200k
01/06/22Continuing Claims1678k1754k1716k1718k
01/06/22ISM Services Index676269.1
01/06/22Factory Orders1.50%1.60%1.00%1.20%
01/06/22Factory Orders Ex Trans1.10%0.80%1.60%1.50%
01/06/22Durable Goods Orders2.50%2.60%2.50%
01/06/22Durables Ex Transportation0.90%0.80%
01/06/22Cap Goods Orders Nondef Ex Air0.00%-0.10%
01/06/22Cap Goods Ship Nondef Ex Air0.30%0.30%
01/07/22Revisions: Employment Report — Household Survey
01/07/22Change in Nonfarm Payrolls450k199k210k249k
01/07/22Two-Month Payroll Net Revision141k
01/07/22Change in Private Payrolls400k211k235k270k
01/07/22Change in Manufact. Payrolls35k26k31k35k
01/07/22Unemployment Rate4.10%3.90%4.20%
01/07/22Average Hourly Earnings MoM0.40%0.60%0.30%0.40%
01/07/22Average Hourly Earnings YoY4.20%4.70%4.80%5.10%
01/07/22Average Weekly Hours All Employees34.834.734.834.7
01/07/22Labor Force Participation Rate61.90%61.90%61.80%61.90%
01/07/22Underemployment Rate7.30%7.80%7.70%
01/07/22Consumer Credit$20.000b$16.897b

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