October 2, 2020 Headlines

News of President Trump and the First Lady testing positive for coronavirus has sparked a broad risk-off trade in financial markets. Treasury yields are lower and flatter, and S&P 500 futures are down 1.3% ahead of the open.

Nonfarm payrolls added 661,000 jobs in September, nearly 200,000 less than expected. Private payrolls added 877,000 jobs in the month, with the difference between the two being a 216,000 reduction in government jobs. The reduction of government jobs was primarily concentrated in educational services, which is likely attributable to less school hiring this year because of Covid. In the household survey, the headline unemployment rate fell 50 bps to 7.9% (8.2% expected), but the underlying numbers weren’t exactly great. Household employment grew by 275,000, by far the smallest gain in the current recovery, and the labor force declined by 695,000, pushing the labor participation rate down 30 bps to 61.4%.

Overall, this is a good report, but the reduction in labor force participation will likely be a big talking point in economic and policy circles. With enhanced federal unemployment benefits expiring back in July, one would reasonably expect the labor force to be increasing at this point, and this will likely heighten the debate for additional fiscal aid from Congress.

Jason Haley
Chief Investment Officer

Date Event Survey Actual Prior Revised
9/28/20 Dallas Fed Manf. Activity 9.5 13.6 8
9/29/20 Advance Goods Trade Balance -$81.8b -$82.9b -$79.3b -$80.1b
9/29/20 Wholesale Inventories MoM -0.10% 0.50% -0.30% -0.10%
9/29/20 Retail Inventories MoM 1.10% 0.80% 1.20%
9/29/20 S&P CoreLogic CS 20-City MoM SA 0.10% 0.55% 0.00%
9/29/20 S&P CoreLogic CS 20-City YoY NSA 3.60% 3.95% 3.46%
9/29/20 S&P CoreLogic CS 20-City NSA Index 226.55 225.13 225.14
9/29/20 S&P CoreLogic CS US HPI YoY NSA 4.78% 4.29% 4.35%
9/29/20 S&P CoreLogic CS US HPI NSA Index 221.64 219.82 219.92
9/29/20 Conf. Board Consumer Confidence 90 101.8 84.8 86.3
9/29/20 Conf. Board Present Situation 98.5 84.2 85.8
9/29/20 Conf. Board Expectations 104 85.2 86.6
9/30/20 MBA Mortgage Applications -4.80% 6.80%
9/30/20 ADP Employment Change 649k 749k 428k 481k
9/30/20 MNI Chicago PMI 52 62.4 51.2
9/30/20 GDP Annualized QoQ -31.70% -31.40% -31.70%
9/30/20 Personal Consumption -34.10% -33.20% -34.10%
9/30/20 GDP Price Index -2.00% -1.80% -2.00%
9/30/20 Core PCE QoQ -1.00% -0.80% -1.00%
9/30/20 Pending Home Sales MoM 3.10% 8.80% 5.90%
9/30/20 Pending Home Sales NSA YoY 17.60% 20.50% 15.40%
10/1/20 Challenger Job Cuts YoY 185.90% 116.50%
10/1/20 Initial Jobless Claims 850k 837k 870k 873k
10/1/20 Continuing Claims 12200k 11767k 12580k 12747k
10/1/20 Personal Income -2.50% -2.70% 0.40% 0.50%
10/1/20 Personal Spending 0.80% 1.00% 1.90% 1.50%
10/1/20 Real Personal Spending 0.50% 0.70% 1.60% 1.10%
10/1/20 PCE Deflator MoM 0.30% 0.30% 0.30% 0.40%
10/1/20 PCE Deflator YoY 1.20% 1.40% 1.00% 1.10%
10/1/20 PCE Core Deflator MoM 0.30% 0.30% 0.30% 0.40%
10/1/20 PCE Core Deflator YoY 1.40% 1.60% 1.30% 1.40%
10/1/20 Bloomberg Consumer Comfort 49.3 49.8
10/1/20 Markit US Manufacturing PMI 53.5 53.2 53.5
10/1/20 Construction Spending MoM 0.70% 1.40% 0.10% 0.70%
10/1/20 ISM Manufacturing 56.5 55.4 56
10/1/20 ISM New Orders 65.2 60.2 67.6
10/1/20 ISM Prices Paid 58.8 62.8 59.5
10/1/20 ISM Employment 49.6 46.4
10/1/20 Wards Total Vehicle Sales 15.70m 16.34m 15.19m
10/2/20 Two-Month Payroll Net Revision 145k
10/2/20 Change in Nonfarm Payrolls 859k 661k 1371k 1489k
10/2/20 Change in Private Payrolls 850k 877k 1027k 1022k
10/2/20 Change in Manufact. Payrolls 35k 66k 29k 36k
10/2/20 Unemployment Rate 8.20% 7.90% 8.40%
10/2/20 Average Hourly Earnings MoM 0.20% 0.10% 0.40% 0.30%
10/2/20 Average Hourly Earnings YoY 4.80% 4.70% 4.70% 4.60%
10/2/20 Average Weekly Hours All Employees 34.6 34.7 34.6
10/2/20 Labor Force Participation Rate 61.90% 61.40% 61.70%
10/2/20 Underemployment Rate 12.80% 14.20%
10/2/20 U. of Mich. Sentiment 79 78.9
10/2/20 U. of Mich. Current Conditions 87.5
10/2/20 U. of Mich. Expectations 73.3
10/2/20 U. of Mich. 1 Yr Inflation 2.70%
10/2/20 U. of Mich. 5-10 Yr Inflation 2.60%
10/2/20 Factory Orders 0.90% 6.40%
10/2/20 Factory Orders Ex Trans 1.10% 2.10%
10/2/20 Durable Goods Orders 0.40% 0.40%
10/2/20 Durables Ex Transportation 0.40% 0.40%
10/2/20 Cap Goods Orders Nondef Ex Air 1.70% 1.80%
10/2/20 Cap Goods Ship Nondef Ex Air 1.50%

 

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