the Fed

The Daily Update - NFPR and growth

September’s non-farm payroll released today showed 156k jobs added which was below expectations of +172k. The prior month’s reading of +151k was revised to +167k. The unemployment rate went up to 5% (versus expectations for 4.9%) and average hourly earnings came in at 2.6%yoy, from of 2.4%yoy in August.

For us, the key point is that US growth remains patchy and weak; the IMF cut its US growth forecast for 2016 to 1.6% from 2.2% and downgraded 2017 to 2.2%. In fact since the GFC US growth on an annual basis has been 2.5% or above in only 2 years one of which was 2015: this paled with the more buoyant decade or so pre-GFC. While indicators such as 2Q GDP have been revised up to 1.4% on a quarterly annualised basis and the September ISMs for both manufacturing and services showed improvement indicators such as the Chicago Fed National Activity Index, a broad based indicator of 85 economic variables, fell to -0.55 in August.

The Daily Update - Income and investment

This week the Census Bureau released data showing that real median household income grew 5.2 percent between 2014 and 2015 to USD 56,516; this was the fastest pace of annual growth since the data started being reported in 1967.  Moreover, there was growth across the different income levels and the number of people living in poverty also fell by 3.5 million.  However, while the data, on a redesigned set of income questions since 2013, shows good improvement, this does not escape the fact that income levels are still lower than before the onset of the recession. 

The Daily Update - NFPR

August is a notorious month for the market overestimating the rate of jobs growth with the miss ranging from 11,000 to 88,000 over the past five years; yet again this has proved to be the case with 151,000 jobs added against expectations of 180,000 jobs added.  The strong July figure was revised up from 255,000 to 275,000 jobs and the two month revision came in at - 1,000.  The unemployment rate was unchanged from the previous month at 4.9 percent and the participation rate was unchanged at 62.8 percent.  The average hourly earnings came in at 2.4 percent yoy, slightly below with expectations and the prior month.  Average hours worked edged lower to 34.3.

The Daily Update - NFPR

Today’s July non-farm payroll data was stronger than expectations: 255,000 jobs were added against expectations of 180,000 jobs added.  The strong June figure was revised up from 287,000 to 292,000 jobs and the two month revision came in at 18,000.  The unemployment rate was unchanged from the previous month at 4.9 percent and the participation rate edged up to 62.8 percent.  The average hourly earnings came in at 2.6 percent yoy, in line with expectations and the prior month.  Average hours worked edged higher to 34.5.

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