Morning Report: Lots of labor data

Vital Statistics:

 

Last Change
S&P futures 2723 12.25
Eurostoxx index 364.42 2.24
Oil (WTI) 64.81 -0.46
10 year government bond yield 3.16%
30 year fixed rate mortgage 4.89%

 

Stocks are higher this morning after yesterday’s end of month window dressing. Bonds and MBS are down again.

 

The ADP report showed the US economy added 227,000 jobs in October, which is well ahead of the Street estimate for Friday’s BLS report. There was a big (typically seasonal) increase in transportation and retail, although professional / business services was strong as well. Mark Zandi, chief economist of Moody’s Analytics, said, “The job market bounced back strongly last month despite being hit by back-to-back hurricanes. Testimonial to the robust employment picture is the broad-based gains in jobs across industries. The only blemish is the struggles small businesses are having filling open job positions.” Large and medium sized employers (50 employees +) accounted for the lion’s share of new jobs.

 

ADP jobs report

 

With added employees comes added employee cost. The Employment Cost Index rose 0.8% QOQ and 2.8% YOY. The wage component of employment costs rose 2.9% while the benefit portion rose 2.4%. The drop in healthcare costs is helping wages as higher healthcare costs of consumed a lot of employee raises. Your cost of healthcare ate your cost of living raise.

 

Mortgage Applications decreased 2.5% last week as purchases fell 2% and refis fell 4%. Rates held steady. “The 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall. Purchase applications inched backward from the previous week, as well as compared to one year ago – the first year-over-year decline in purchase activity since August,” said Joel Kan, AVP of economic and industry forecasts. “Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks. Additionally, the ARM share of applications increased to its highest level since 2017, but since this is a compositional measure, it was driven by a greater decrease in applications for fixed-term loans relative to the decrease in ARM applications.”

 

The Challenger and Gray job cut report rose last month, but it is a third-tier employment data point. It focuses on job cut announcements, which may or may not happen.

 

The homeownership rate rose 64.4% according to the Census Bureau. This was up 0.1% from the second quarter and 0.4% from a year ago. The homeownership rate has been ticking up, although the big jump in homeownership from 1994 to 2005 was partially driven by aggressive social engineering out of Washington and probably was artificially high.

 

homeownership rate NAD

5 Responses

  1. Dynamite thread from a New Yorker staff writer,

    Spot on!

    Like

    • boilerplate leftist rhetoric… every R politician since Eisenhower has been Literally. Hitler.

      Like

    • This is the problem with objectivity as a concept. People “feel” objective when they are being radically subjective.

      Thus they believe their malformed, fact-free opinions are clear, objective facts that should be obvious to any intelligent, rational person. Their emotions tell them this is true and further introspection or analysis is a waste of time and just muddies the clear, indisputable truth.

      The fact that he says that is actually a red flag that he’s not objective on the issue. You would never think to say that about actual raw data, such as it is raining or the sky is blue.

      But you do it when you are under the delusion you can read people’s mind and are an almost-omniscient, godlike observer of events and lesser mortals mistakenly given a role in electing their rulers must be informed. Since they can’t read minds nearly as well as you can, obviously.

      Like

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