Asian equity markets surged higher overnight on a report that President Trump will ask his cabinet to draft a trade deal with China following a “positive” phone call yesterday between Trump and China’s Xi.  The Hang Seng and Nikkei closed up 4.2% and 2.6%, respectively, and European equities and U.S. futures are higher as well. The phone call was reportedly initiated by President Trump, and the timing of the call comes after many companies expressed concerns about trade in Q3 earnings calls (and before mid-term election day).

October was another strong month for the labor market. Nonfarm payrolls added 250,000 jobs (50,000 more than expected), and average hourly earnings rose a 3.1% year-over-year pace, the highest rate in nearly a decade. In the household survey, a 600,000 increase in household employment was enough to keep the headline unemployment rate unchanged at 3.7% despite a 711,000 increase in the official labor pool. The labor force participation rate rose 20 bps to 62.9%. Some are questioning the hurricane impact on the figures, but today’s report is largely in line with the longer-term trend. A consistent theme in Q3 corporate earnings reports was rising costs, including wages, and these higher costs are likely to lead to higher prices to consumers in the coming months.

Jason Haley
Managing Director, Investment Management Group


10/29Personal Income0.40%0.20%0.30%
10/29Personal Spending0.40%0.40%0.30%
10/29Real Personal Spending0.30%0.30%0.20%
10/29PCE Deflator MoM0.10%0.10%0.10%
10/29PCE Deflator YoY2.00%2.00%2.20%
10/29PCE Core MoM0.10%0.20%0.00%
10/29PCE Core YoY2.00%2.00%2.00%
10/29Dallas Fed Manf. Activity28.129.428.1
10/30S&P CoreLogic CS 20-City MoM SA0.10%0.09%0.09%
10/30S&P CoreLogic CS 20-City YoY NSA5.80%5.49%5.92%
10/30S&P CoreLogic CS 20-City NSA Index213.72213.76
10/30S&P CoreLogic CS US HPI NSA Index205.81205.35
10/30S&P CoreLogic CS US HPI YoY NSA5.77%6.00%
10/30Conf. Board Consumer Confidence135.9137.9138.4
10/30Conf. Board Present Situation172.8173.1
10/30Conf. Board Expectations114.6115.3
10/31MBA Mortgage Applications-2.50%4.90%
10/31ADP Employment Change187k227k230k
10/31Employment Cost Index0.70%0.80%0.60%
10/31Chicago Purchasing Manager6058.460.4
11/01Challenger Job Cuts YoY153.60%70.90%
11/01Nonfarm Productivity2.10%2.20%2.90%
11/01Unit Labor Costs1.00%1.20%-1.00%
11/01Initial Jobless Claims212k214k215k
11/01Continuing Claims1640k1631k1636k
11/01Bloomberg Consumer Comfort60.360.1
11/01Markit US Manufacturing PMI55.855.755.9
11/01Construction Spending MoM0.00%0.00%0.10%
11/01ISM Manufacturing5957.759.8
11/01ISM Employment56.858.8
11/01ISM Prices Paid6971.666.9
11/01ISM New Orders57.461.8
11/01Wards Total Vehicle Sales17.05m17.50m17.40m
11/02Trade Balance-$53.6b-$54.0b-$53.2b
11/02Change in Nonfarm Payrolls200k250k134k
11/02Two-Month Payroll Net Revision0k
11/02Change in Private Payrolls195k246k121k
11/02Change in Manufact. Payrolls16k32k18k
11/02Unemployment Rate3.70%3.70%3.70%
11/02Underemployment Rate7.40%7.50%
11/02Average Hourly Earnings MoM0.20%0.20%0.30%
11/02Average Hourly Earnings YoY3.10%3.10%2.80%
11/02Average Weekly Hours All Employees34.534.534.5
11/02Labor Force Participation Rate62.70%62.90%62.70%
11/02Factory Orders0.50%0.70%2.30%
11/02Factory Orders Ex Trans0.40%0.10%
11/02Durable Goods Orders0.70%0.80%
11/02Durables Ex Transportation0.00%0.10%
11/02Cap Goods Orders Nondef Ex Air-0.10%-0.10%
11/02Cap Goods Ship Nondef Ex Air-0.10%0.00%