Vital Statistics:
Stocks are flattish this morning after good numbers out of Google. Bonds and MBS are up. Lots of data today.
The economy added 233,000 jobs in October, according to the ADP Employment Survey. “Even amid hurricane recovery, job growth was strong in October,” said Nela Richardson, chief economist, ADP. “As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient.”
Wage inflation fell to 4.6% for job stayers and 6.2% for job changers. The expectation for Friday’s jobs report is 125,000, so we might be looking at a stronger-than-expected report.
Job openings fell to 7.44 million in September from 7.86 million in August, according to the JOLTS. Last year at this time, there were 9.31 million openings, so the labor market has cooled pretty dramatically. The quits rate fell to 1.9%, which is an indication that workers are nervous about taking a new job.
Third quarter GDP rose 2.8%, according to BEA. The Street was expecting a 3% increase, so this is somewhat disappointing. Consumption and Federal government spending were big drivers of growth, while inventory and housing were a drag on the number.
The PCE Price Index rose at a 1.5% annual rate and the core PCE Price Index (excluding food and energy) rose 2.2%. The savings rate fell.
Mortgage Applications fell 0.1% last week as purchases increased 4% and refis fell 6%. “Mortgage applications were essentially flat last week as rates increased for the fourth time in five weeks, driven by bond market volatility in advance of the presidential election and the next FOMC meeting. The 30-year fixed rate, at 6.73 percent, was at its highest level since July 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After a brief burst of activity in September when rates were almost 60 basis points lower, overall applications have declined 27 percent, driven by a pullback in refinances. Government refinances accounted for a large part of the decrease, dropping 12 percent over last week. Purchase applications increased compared to a holiday-shortened week and were 10 percent higher than a year ago. While near-term purchase application activity has weakened, we continue to expect housing demand from younger homebuyers to support purchase growth over the next few years as for-sale inventory loosens gradually.”
Consumer confidence improved in October, according to the Conference Board. “Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained positive about future income. Also, for the first time since July 2023, they showed some cautious optimism about future job availability.
“October’s increase in confidence was broad-based across all age groups and most income groups. In terms of age, confidence rose sharpest for consumers aged 35 to 54. On a six-month moving average basis, householders aged under 35 and those earning over $100K remained the most confident.”
