Stocks are lower after the jobs report disappointed. Bonds and MBS are up big
Jobs report data dump:
- Change in nonfarm payrolls +142k vs. +201k expected
- Two month revision -59k
- Unemployment rate 5.1% (in line with expectations)
- Average Hourly earnings 0% month over month +2.2% YOY
- Labor force participation rate falls to 62.4%
Very disappointing jobs report. No wage growth, and the labor force participation rate has fallen all the way back to Oct 1977 levels, which was the time when Reggie Jackson earned his nickname Mr October.
Stock index futures reversed a strong rally on the news. The 10 year bond yield dropped 12 basis points as well. It certainly looks like the decision to stand pat in September was the right one. For all the Fed’s discussion of October being a “live” FOMC meeting, consider it dead.
In other economic news, factory orders fell 1.7% in August and the ISM New York index fell to 44.5 from 51.1.
Yesterday, the House Financial Services Committee passed a bill to bring a bit of accountability and control to the CFPB. The director will be replaced with a 5 member commission, and there will be an inspector general. The CFPB is currently under the Fed, and gets its funding there. Congress has no say over their operations. This was intentional, to prevent a more conservative Congress from de-fanging the agency.
Finally, it looks like Hurricane Joaquin is going to miss the East Coast.
Filed under: Morning Report |