November 6, 2020 Headlines

Treasury yields are rising following the release of a very solid October jobs report. Nonfarm payroll added 638,000 jobs during the month, nearly 60,000 more than expected. Excluding the government sector, which lost 147,000 jobs from temporary census workers, private payrolls added 906,000 jobs, well above the 680,000 expected. Perhaps the biggest headline from this report was the unemployment rate, which fell 100 bps to 6.9% (7.6% expected), and at the same time the labor force participation rate rose 30 bps to 61.7%. In other words, the bigger than expected decline in unemployment wasn’t just a matter of people leaving the labor force, as was the case last in September.  With a big, unexpected move like this, there will be natural skepticism regarding contribution from seasonal factors/adjustments, but it would be hard to argue that this report is anything but encouraging. Yes, this economy still has a long way to go in recovering amid this pandemic, particularly for certain sectors struggling the most, but this report shows solid progress.   

Jason Haley
Chief Investment Officer

11/02/20Markit US Manufacturing PMI53.353.453.3
11/02/20ISM Manufacturing5659.355.4
11/02/20ISM New Orders6267.960.2
11/02/20ISM Prices Paid61.565.562.8
11/02/20ISM Employment53.249.6
11/02/20Construction Spending MoM1.00%0.30%1.40%0.80%
11/03/20Factory Orders1.00%1.10%0.70%0.60%
11/03/20Factory Orders Ex Trans0.60%0.50%0.70%0.90%
11/03/20Durable Goods Orders1.90%1.90%1.90%
11/03/20Durables Ex Transportation0.80%0.90%0.80%
11/03/20Cap Goods Orders Nondef Ex Air1.00%1.00%1.00%
11/03/20Cap Goods Ship Nondef Ex Air0.50%0.30%
11/03/20Wards Total Vehicle Sales16.50m16.21m16.34m
11/04/20MBA Mortgage Applications3.80%1.70%
11/04/20ADP Employment Change643k365k749k753k
11/04/20Trade Balance-$63.9b-$63.9b-$67.1b-$67.0b
11/04/20Markit US Services PMI5656.956
11/04/20Markit US Composite PMI56.355.5
11/04/20ISM Services Index57.556.657.8
11/05/20Challenger Job Cuts YoY60.40%185.90%
11/05/20Initial Jobless Claims735k751k751k758k
11/05/20Continuing Claims7200k7285k7756k7823k
11/05/20Nonfarm Productivity5.60%4.90%10.10%10.60%
11/05/20Unit Labor Costs-11.00%-8.90%9.00%8.50%
11/05/20Bloomberg Consumer Comfort47.546.3
11/05/20FOMC Rate Decision (Upper Bound)0.25%0.25%0.25%
11/05/20FOMC Rate Decision (Lower Bound)0.00%0.00%0.00%
11/05/20Interest Rate on Excess Reserves0.10%0.10%0.10%
11/06/20Change in Nonfarm Payrolls580k638k661k672k
11/06/20Two-Month Payroll Net Revision15k
11/06/20Change in Private Payrolls680k906k877k892k
11/06/20Change in Manufact. Payrolls55k38k66k60k
11/06/20Unemployment Rate7.60%6.90%7.90%
11/06/20Average Hourly Earnings MoM0.20%0.10%0.10%0.00%
11/06/20Average Hourly Earnings YoY4.50%4.50%4.70%4.60%
11/06/20Average Weekly Hours All Employees34.734.834.734.8
11/06/20Labor Force Participation Rate61.50%61.70%61.40%
11/06/20Underemployment Rate12.10%12.80%
11/06/20Wholesale Inventories MoM-0.10%-0.10%
11/06/20Wholesale Trade Sales MoM1.10%1.40%
11/06/20Consumer Credit$8.000b-$7.220b



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