Week of January 6 - 10, 2020

Maureen Kelliher, CFA

Maureen Kelliher, CFA

January 15, 2020

Weekly Economic Review

Weekly Macro Updates

Unemployment Rate (Dec) 3.5% est., 3.5% actual, 3.5% prior
Change in Nonfarm Payrolls (Dec) 160k est., 145k actual, 256k prior: R-
Change in Private Payrolls (Dec) 153k est., 139k actual, 243k prior: R-
Change in Manufact. Payrolls (Dec) 5k est., -12k actual, 58k prior: R+
Initial Jobless Claims (Jan 4) 220k est., 214k actual, 223k prior: R+
Continuing Claims (Dec 28) 1720k est., 1803k actual, 1728k prior
Average Hourly Earnings YoY (Dec) 3.1% est., 2.9% actual, 3.1% prior
Labor Force Participation Rate (Dec) 63.2% actual, 63.2% prior
Underemployment Rate (Dec) 6.7% actual, 6.9% prior
ADP Employment Change (Dec) 160k est., 202k actual, 124k prior: R+
Bloomberg Consumer Comfort (Jan 5) 65.3 actual, 63.9 prior
Durable Goods Orders (Nov F) -2.0% est., -2.1% actual, -2.0% prior
Durables ex Transportation (Nov F) -0.1% actual, 0.0% prior
Cap Goods Orders Nondef Ex Air (Nov F) 0.2% actual, 0.1% prior
 

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.

Capital Market Implications

December employment releases marked a 10th straight year of employment gains in the US, as the labor market has continued to have slow but steady growth.  New entrants have continued to join the workforce, including women who now account for a majority of nonfarm payrolls.  Disadvantaged groups, such as high school dropouts, have also seen an increase in hiring.  Wage growth, which has unexpectedly lagged in spite of record low unemployment, grew less than expected over the past year, although minimum wage workers have seen better than average increases.  Manufacturing releases remain muted as orders again showed declines.

Equity markets continued their upward trajectory last week driven by optimism over trade and rebounding global growth.  The S&P 500 Index and the Dow Jones Index were both up strongly, gaining 1.0% and 0.7%, respectively.  Growth stocks continued to outperform value stocks, up 1.9% versus 0.1%.  Small caps lagged, down -0.2%.  International markets were mixed, with developed markets down slightly for the week while emerging markets appreciated 0.9%.  Bond markets were mixed for the week, with the aggragate index down -0.1%.  Corporate markets were also down slightly, -0.1% while municipal bonds gained 0.3%.  High yield markets were also up, returning 0.2%.