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

DateEventSurveyActualPriorRevised
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 Index—226.55225.13225.14
9/29/20S&P CoreLogic CS US HPI YoY NSA—4.78%4.29%4.35%
9/29/20S&P CoreLogic CS US HPI NSA Index—221.64219.82219.92
9/29/20Conf. Board Consumer Confidence90101.884.886.3
9/29/20Conf. Board Present Situation—98.584.285.8
9/29/20Conf. Board Expectations—10485.286.6
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 YoY—185.90%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 Comfort—49.349.8—
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 Employment—49.646.4—
10/1/20Wards Total Vehicle Sales15.70m16.34m15.19m—
10/2/20Two-Month Payroll Net Revision—145k——
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 Rate—12.80%14.20%—
10/2/20U. of Mich. Sentiment79—78.9—
10/2/20U. of Mich. Current Conditions——87.5—
10/2/20U. of Mich. Expectations——73.3—
10/2/20U. of Mich. 1 Yr Inflation——2.70%—
10/2/20U. of Mich. 5-10 Yr Inflation——2.60%—
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 Air——1.50%—

 

Subscribe Today!

Subscribe to our email list and get the latest articles and announcements from ALM First.

Subscribe
ALM First offers investment advisory services through ALM First Financial Advisors, LLC, which is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. The information contained herein does not constitute investment advice or a recommendation for you to purchase or sell any specific security. You are solely responsible for reviewing the content and for any actions you take or choose not to take based on your review of such content.Information contained herein was derived from third party sources as indicated. While such information is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to ALM First.Statements herein that reflect projections or expectations of future financial or economic performance are forward-looking statements. Such “forward-looking” statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or actual performance. No representation or warranty can be given that the estimates, opinions or assumptions made herein will prove to be accurate. Any projections and forward-looking statements included herein should be considered speculative and are qualified in their entirety by the information and risks disclosed in the confidential offering document. Actual results for any period may or may not approximate such forward-looking statements. No representations or warranties whatsoever are made by ALM First Financial Advisors, LLC or any other person or entity as to the future profitability of investments recommended by ALM First Financial Advisors, LLC.