Vital Statistics:
Stocks are lower this morning as earnings continue to come in. Bonds and MBS are up small.
Personal income rose 0.3% MOM in September, according to the BEA. Personal Consumption expenditures rose 0.5%. The income number was 0.1% below expectations, while consumption was above expectations.
The PCE Price Index (the Fed’s preferred measure of inflation) rose 0.2% MOM and 2.1% YOY. These numbers were in line with Street expectations. The PCE Price index ex food and energy rose 0.3% MOM and 2.7% YOY. The annual number was .1% higher than expectations.
The inflation numbers continue to move in their downward trend, which means the Fed is highly likely to cut the Fed Funds rate by another 25 basis points at their meeting next week.
The employment cost index rose 0.8% in Q3, which was driven by higher compensation for government workers.
Companies announced 55,597 job cuts in October, according to the Challenger and Gray Job Cut Report. These numbers are based on press releases, so they measure intent more than actual layoffs. “Job openings have fallen and hiring is pretty flat at the moment. Companies appear to be in a holding pattern as we await election results and the potential regulatory and market environment that follows,” said Andrew Challenger, Senior Vice President and workplace expert for Challenger, Gray & Christmas, Inc.
About a third of the job cuts came from Boeing. Tech continues to be the biggest job cutter, followed by retail.
Pending Home Sales rose 7.4% in September, according to NAR. “Contract signings rose across all regions of the country as buyers took advantage of the combination of lower mortgage rates in late summer and more inventory choices,” said NAR Chief Economist Lawrence Yun. “Further gains are expected if the economy continues to add jobs, inventory levels grow, and mortgage rates hold steady. After two years of sluggish home sales in 2023 and 2024, existing-home sales are forecasted to rise to 4.47 million in 2025 and more than 5 million in 2026,” Yun said. “During the next two years, expect a slower rate of growth in home prices that’s roughly in line with the consumer price index because of additional supply reaching the market.”
