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

9/28/20Dallas Fed Manf. Activity9.513.68
9/29/20Advance Goods Trade Balance-$81.8b-$82.9b-$79.3b-$80.1b
9/29/20Wholesale Inventories MoM-0.10%0.50%-0.30%-0.10%
9/29/20Retail Inventories MoM1.10%0.80%1.20%
9/29/20S&P CoreLogic CS 20-City MoM SA0.10%0.55%0.00%
9/29/20S&P CoreLogic CS 20-City YoY NSA3.60%3.95%3.46%
9/29/20S&P CoreLogic CS 20-City NSA Index226.55225.13225.14
9/29/20S&P CoreLogic CS US HPI YoY NSA4.78%4.29%4.35%
9/29/20S&P CoreLogic CS US HPI NSA Index221.64219.82219.92
9/29/20Conf. Board Consumer Confidence90101.884.886.3
9/29/20Conf. Board Present Situation98.584.285.8
9/29/20Conf. Board Expectations10485.286.6
9/30/20MBA Mortgage Applications-4.80%6.80%
9/30/20ADP Employment Change649k749k428k481k
9/30/20MNI Chicago PMI5262.451.2
9/30/20GDP Annualized QoQ-31.70%-31.40%-31.70%
9/30/20Personal Consumption-34.10%-33.20%-34.10%
9/30/20GDP Price Index-2.00%-1.80%-2.00%
9/30/20Core PCE QoQ-1.00%-0.80%-1.00%
9/30/20Pending Home Sales MoM3.10%8.80%5.90%
9/30/20Pending Home Sales NSA YoY17.60%20.50%15.40%
10/1/20Challenger Job Cuts YoY185.90%116.50%
10/1/20Initial Jobless Claims850k837k870k873k
10/1/20Continuing Claims12200k11767k12580k12747k
10/1/20Personal Income-2.50%-2.70%0.40%0.50%
10/1/20Personal Spending0.80%1.00%1.90%1.50%
10/1/20Real Personal Spending0.50%0.70%1.60%1.10%
10/1/20PCE Deflator MoM0.30%0.30%0.30%0.40%
10/1/20PCE Deflator YoY1.20%1.40%1.00%1.10%
10/1/20PCE Core Deflator MoM0.30%0.30%0.30%0.40%
10/1/20PCE Core Deflator YoY1.40%1.60%1.30%1.40%
10/1/20Bloomberg Consumer Comfort49.349.8
10/1/20Markit US Manufacturing PMI53.553.253.5
10/1/20Construction Spending MoM0.70%1.40%0.10%0.70%
10/1/20ISM Manufacturing56.555.456
10/1/20ISM New Orders65.260.267.6
10/1/20ISM Prices Paid58.862.859.5
10/1/20ISM Employment49.646.4
10/1/20Wards Total Vehicle Sales15.70m16.34m15.19m
10/2/20Two-Month Payroll Net Revision145k
10/2/20Change in Nonfarm Payrolls859k661k1371k1489k
10/2/20Change in Private Payrolls850k877k1027k1022k
10/2/20Change in Manufact. Payrolls35k66k29k36k
10/2/20Unemployment Rate8.20%7.90%8.40%
10/2/20Average Hourly Earnings MoM0.20%0.10%0.40%0.30%
10/2/20Average Hourly Earnings YoY4.80%4.70%4.70%4.60%
10/2/20Average Weekly Hours All Employees34.634.734.6
10/2/20Labor Force Participation Rate61.90%61.40%61.70%
10/2/20Underemployment Rate12.80%14.20%
10/2/20U. of Mich. Sentiment7978.9
10/2/20U. of Mich. Current Conditions87.5
10/2/20U. of Mich. Expectations73.3
10/2/20U. of Mich. 1 Yr Inflation2.70%
10/2/20U. of Mich. 5-10 Yr Inflation2.60%
10/2/20Factory Orders0.90%6.40%
10/2/20Factory Orders Ex Trans1.10%2.10%
10/2/20Durable Goods Orders0.40%0.40%
10/2/20Durables Ex Transportation0.40%0.40%
10/2/20Cap Goods Orders Nondef Ex Air1.70%1.80%
10/2/20Cap Goods Ship Nondef Ex Air1.50%


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