Week of October 29 - November 2

Maureen Kelliher, CFA

Maureen Kelliher, CFA

November 7, 2018

Weekly Economic Review

Weekly Macro Updates

Unemployment Rate (Oct) 3.7% est., 3.7% actual, 3.7% prior
Initial Jobless Claims (Oct 27) 212k est., 214k actual, 216k prior: R+
Continuing Claims (Oct 20) 1640k est., 1631k actual, 1638k prior: R+
Change in Nonfarm Payrolls (Oct) 200k est., 250k actual, 118k prior: R-
Average Hourly Earnings YoY (Oct) 3.1% est., 3.1% actual, 2.8% prior
Personal Income (Sep) 0.4% est., 0.2% actual, 0.4% prior: R+
Personal Spending (Sep) 0.4% est., 0.4% actual, 0.5% prior: R+
Conf. Board Consumer Confidence (Oct) 135.9 est., 137.9 actual, 135.3 prior: R-
Wards Total Vehicle Sales (Oct) 17.05m est., 17.50m actual, 17.40m prior
PCE Core YoY (Sep) 2.0% est., 2.0% actual, 2.0% prior
PCE Deflator YoY (Sep) 2.0% est., 2.0% actual, 2.0% prior
ISM Manufacturing (Oct) 59.0 est., 57.7 actual, 59.8 prior
Factory Orders (Sep) 0.5% est., 0.7% actual, 2.6% prior: R+
Chicago Purchasing Manager (Oct) 60.0 est., 58.4 actual, 60.4 prior

 Strong or Improving

 Inconclusive or lacking trend

 Weak or declining

R+ Revised up

R- Revised down

Capital Market Implications

In spite of the recent choppiness in the markets, economic releases continue to show strength in the economy. Employment numbers continue to be at record levels, with Friday’s report showing the 97th consecutive month of job growth; the unemployment rate remained at 3.7% as over 700,000 people joined the workforce in October. Wage growth is finally evident, showing a significant jump over the last year. This increase was slightly inflated due to a hurricane related wage dip last October; however, wages finally seem to be on an upward trajectory due to productivity growth. The tone of manufacturing reports has been more muted as concerns over tariffs and falling global growth continue.

Stocks bounced back last week, with both the U.S. and international markets ending up positive.  The S&P 500 Index was up 2.5% and the Dow gained 2.4%. The Russell 2000 Index was up 4.4%, with value stocks returning 3.0% and growth stocks up 2.2%. Emerging markets saw the largest weekly gain, up 6.1%; developed markets increased 3.4%. Most bond markets were down for the week, with the U.S. Aggregate Index down -0.7%. Corporate bonds lost -0.8% and municipals were down -0.5%. High yields bonds, which tend to move with stocks, were positive, up 0.2%.