Week of March 4 - 8, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

March 13, 2019

Weekly Economic Review

Weekly Macro Updates

Unemployment Rate (Feb) 3.9% est., 3.8% actual, 4.0% prior: R+
Underemployment Rate (Feb) 7.3% actual, 8.1% prior
Average Hourly Earnings YoY (Feb) 3.3% est., 3.4% actual. 3.1% prior: R-
Labor Force Participation Rate (Feb) 63.2% est., 63.2% actual, 63.2% prior
Change in Nonfarm Payrolls (Feb) 180k est., 20k actual, 311k prior: R+
Initial Jobless Claims (Mar 2) 225k est., 223k actual, 226k prior: R+
Continuing Claims (Feb 23) 1772k est., 1755k actual, 1805k prior
Nonfarm Productivity (4Q) 1.5% est., 1.9% actual, 1.8% prior: R-
Bloomberg Consumer Comfort (Mar 3) 62.1 actual, 61.0 prior
New Home Sales (Dec) 600k est., 621k actual, 599k prior: R-
Housing Starts MoM (Jan) 10.9% est., 18.6% actual, -14.0% prior: R-
Building Permits MoM (Jan) -2.9% est., 1.4% actual, 0.3% prior
Markit US Composite PMI (Feb F) 55.5 actual, 55.8 prior

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

Capital Market Implications

Last week’s jobs report for February showed the weakest growth in over a year, as the effects of the government shutdown, slower construction hiring due to weather issues and the start of announced layoffs by large retailers affected overall job creation.  Despite the weak report, the rolling three month average is +186,000 net new jobs as the unemployment rate fell slightly to 3.8% and the underemployment rate, which includes part timers who are looking for full time work, improved.  Wage growth over the past year was stronger than in recent years and unemployment claims continue to be at record lows.  The unchanged labor force participation rate highlights the challenges employers face in filling job openings and attracting new entrants to the job market.  New home sales saw a rebound from the previous report while stronger than expected housing starts and building permit releases were positive. 

Stock markets suffered their second down week of the year, with the S&P 500 index losing -2.1%.  The Dow Jones index was down -2.2% while the small cap Russell 2000 index saw a drop of -4.2%.  Both growth and value stocks lost over -2.0% last week.  International stocks were in line with the U.S., with developed markets down -1.9% and emerging markets off by -2.0%.  Utilities stocks gained 0.8% for the week while the energy sector was off -3.8%.  Bonds were positive for the week, with the aggregate index gaining 0.7%.  Corporate bonds saw a similar increase while municipals were up 0.4%.  High yield bonds were negative, down -0.5%.