this week
We got some major data releases this week, but they all came with big asterisks. (And the focus remains on AI spending.)
-
economy lost There were an increase of 105,000 jobs* in October and an increase of 64,000 jobs in November.
*DOGE’s deferred resignations, whereby workers were paid till September, dealt a blow 162,000 Decline in federal employment.
-
The unemployment rate rose more than expected to 4.6%** in November, from 4.4% in September.
**The government shutdown is likely to have fueled this as 75% of the increase in unemployment was caused by “temporary layoffs” – a category of furloughed federal workers.
-
Retail sales were flat*** in October.
***Spending on autos declined 1.6% month over month after the September expiration of the EV tax credit, which depressed demand, while lower gas prices contributed to a 0.8% decline in spending at gas stations.
-
Headline CPI inflation slowed to 2.7% year-on-year**** in November from 3.0% in September.
****Two problems: First, the BLS assumed that housing costs were stable in October, one of the largest weights in the CPI. Second, data collection began on November 14 due to the government shutdown, so holiday discounts are likely to have pushed prices lower.
So, for the week, the Nasdaq-100 is up +1% (blue line), and 10-year Treasury yields are down a few bp at 4.15% (black line).
next week
Here are the top shows I’m watching next week:
- Real GDP for the third quarter on Tuesday
- november industrial production on tuesday
- December consumer confidence on Monday
- October Durable Goods Tuesday
