Week of October 7 - 11, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

October 18, 2019

Weekly Economic Review

Weekly Macro Updates

CPI YoY (Sep) 1.8% est., 1.7% actual, 1.7% prior
CPI ex Food and Energy YoY (Sep) 2.4% est., 2.4% actual, 2.4% prior
PPI Final Demand YoY (Sep) 1.8% est., 1.4% actual, 1.8% prior
PPI ex Food and Energy YoY (Sep) 2.3% est., 2.0% actual, 2.3% prior
Import Price Index YoY (Sep) -2.1% est., -1.6% actual, -1.8% prior: R-
Export Price Index YoY (Sep) -1.6% actual, -1.4% prior
Bloomberg Consumer Comfort (Oct 6) 62.7 actual, 62.0 prior
Initial Jobless Claims (Oct 5) 220k est., 210K actual, 220k prior: R+
Continuing Claims (Sep 28) 1651k est., 1684K actual, 1655k prior: R+
Real Avg Hourly Earnings YoY (Sep) 1.2% actual, 1.4% prior: R-
U. of Mich. Sentiment (Oct P) 92.0 est., 96.0 actual, 93.2 prior
U. of Mich. Current Conditions (Oct P) 109.0 est., 113.4 actual, 108.5 prior
U. of Mich. Expectations (Oct P) 82.5 est., 84.8 actual, 83.4 prior
U. of Mich. 1 Yr Inflation (Oct P) 2.5% actual, 2.8% 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

Inflation and pricing were back in focus in last week’s economic releases, with both the CPI and PPI highlighting muted inflation in spite of tariffs and the ongoing trade war.  Falling oil prices has dampened both consumer and producer price measures.  Short term consumer prices have also been influenced by falling prices for oil, used cars and clothing while health care costs were higher.  While unemployment claims have continued to be at historic lows, wage growth was muted, a further indication that the economy remains in a low inflation environment.  

Stocks broke their losing streak last week, with the S&P 500 index gaining 0.7% and the Dow Jones index up 0.9%.  Smaller cap stocks also did well, up 0.8%.  Growth again outperformed value, gaining 0.8% versus 0.5%.  International markets outperformed the US last week, with developed markets appreciating 2.3% while emerging markets were up 1.5%.  Bonds were down last week for the most part, with the aggregate index losing -1.0%.  Corporates saw the biggest losses for the week, down -1.3% while municipals were down -0.3%.  High yield bonds gained 0.3%, aided by the growth in stock markets.