Morning Report: Surprising payroll number

Vital Statistics:


Last Change
S&P futures 2729.75 -20
Eurostoxx index 370.51 -3.3
Oil (WTI) 55.07 -1.53
10 year government bond yield 2.63%
30 year fixed rate mortgage 4.35%


Stocks are lower this morning after Chinese stocks fell 4.4% overnight. Bonds and MBS are up.


Jobs report data dump:

  • Payrolls up 20,000 (huge miss – Street was looking for 180k)
  • Unemployment rate 3.8%
  • Labor force participation rate 63.2%
  • Employment-Population Ratio 60.7%
  • Average hourly earnings up 3.4%

Surprisingly poor payroll number, and a bit of a suprise given the ADP number and all of the other numbers, which indicate strength. I suspect this will get revised upward next month. The average hourly earnings number is the highest in a decade, and probably is a better indicator of the health of the labor market than the payroll number. Still, the first indication of a labor slowdown will be a drop in hiring, so it bears watching.


Housing starts rose 1.23 million in January, which was a touch higher than the Street estimate. Building Permits rose 1.35 million, slightly above the 1.29 million estimate. January housing numbers are typically the nadir of the seasonal slowdown, so it is hard to read too much into them.


Labor productivity rose 1.9% in the fourth quarter as output increased 3.1% and hours worked increased 1.2%. Productivity is what allows non-inflationary growth and is the biggest input into higher standards of living. Unit Labor costs rose 2%.


Initial Jobless Claims fell to 223,000.


House Democrats have introduced legislation to prevent any sort of reform of the CFPB. Their big objection is the fact that Mick Mulvaney ended regulation by enforcement action, which was the practice of promulgating intentionally vague rules and then fining companies for violating them without saying what the rules exactly are. Since the government has unlimited resources and most companies don’t, they choose just to pay whatever the agency asks. Mulvaney also required the agency’s lawyers to conduct cost-benefit analyses for proposed regulations, which they also dislike. The bill has zero Republican sponsors, will go nowhere in the Senate, and is really nothing more than a messaging exercise.


Rising home prices means rising home equity. In the fourth quarter, homeowners saw their equity increase by 8.1%, or $678 billion, according to CoreLogic. The number of homes with negative equity rose to 2.2 million units, however the amount of the negative equity also fell. Louisiana, Connecticut, and Illinois have the highest percentage of homes with negative equity, while Washington, Oregon, and Utah have the smallest.


negative equity

16 Responses

  1. 1984 is alive and well, just run by the online mob instead of the government itself:

    But history will still be purged and rewritten as needed.

    “‘The Simpsons’ is pulling its Michael Jackson episode

    By Lisa Respers France, CNN
    Updated 8:54 AM ET, Fri March 8, 2019

    Brooks said the “Simpsons” producers are taking steps to remove the episode from all platforms including on television, streaming services and Blu-ray/DVD box sets.

    “This was a treasured episode,” Brooks said. “There are a lot of great memories we have wrapped up in that one, and this certainly doesn’t allow them to remain.”
    “I’m against book burning of any kind,” he added. “But this is our book, and we’re allowed to take out a chapter.””

    No, clearly you aren’t against “book burning of any kind”. You just showed on what basis you’ll burn them.


  2. Good read in a similar vein:

    “A Harvard Law School Professor Defends His Decision to Represent Harvey Weinstein

    By Isaac Chotiner
    March 7, 2019”


  3. Perfect ending:

    “‘Empire’ actor Jussie Smollett indicted on 16 felony counts by grand jury
    Smollett was charged last month with felony disorderly conduct for the allegedly false report he made with Chicago police in January.”



    I think it’s worth noting how many of these hate crime hoaxes are perpetrated by people in the top 5% to top 1% of the socioeconomic stratum. Being wealthy and successful and Ivy League (or near) and better off than 95% of the planet’s population is not as attractive or valuable to them as victimhood, and they see no better option to elevate their status or improve their social standing than to be a victim of a hate crime. Which should tell people all they need to know about the reality of “hate crimes”.

    The real conceptual hate crimes are going to be coming from progressives, IMO. And by the looks of things right now are going to be primarily coming at the Jewish people, and are going to be actually bad, rather than pretend bad, because they carry the tacit endorsement of (and possibly, in the future, the enforcement power) of the state.


    • It is kind of funny when you think about people having to create incidents out of whole cloth in order to demonstrate their oppression. Wouldn’t truly oppressed people have a laundry list of real acts of oppression to choose from?


  5. I just got carded buying kitchen matches.


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