Economic Update 11/11/14

UNEMPLOYMENT DOWN TO 5.8%

America’s jobless rate dipped 0.1% in October as companies hired 214,000 new workers. Analysts polled by the Wall Street Journal had expected no improvement. In another nice development, the U-6 rate measuring underemployment plus unemployment fell 0.3% last month to 11.5%, 2.2% lower than a year before. Additionally, the Labor Department revised August and September hiring figures; firms added 31,000 more jobs during those months than previously estimated.¹

ONE SECTOR HEATS UP, ANOTHER COOLS DOWN

October factory and service sector PMIs from the Institute for Supply Management were a mixed bag. The service sector PMI slipped to 57.1 (which was still 2.0 points above where it was a year prior). ISM’s manufacturing PMI, on the other hand, rose 2.4 points for October to 59.0.^2,3

GOLD BREAKS 7-DAY LOSING STREAK; OIL UNDER $80

The yellow metal settled at $1,169.80 an ounce on the COMEX Friday. Its 2.4% Friday advance – representing its first winning market day since October 28 – couldn’t offset a 1.5% weekly retreat. West Texas Intermediate crude finished up the week at a mere $78.65 a barrel on the NYMEX.⁴

FUTURES MOVE HIGHER FOR THE WEEK

Friday found the Dow closing at a record high once more: 17,573.93. It rose 1.04% across five days. The Nasdaq and S&P 500 respectively gained 0.04% and 0.69% last week on their way to respective Friday settlements of 4,632.53 and 2,031.92.⁵

THIS WEEK: Monday, Wall Street examines the latest inflation reading from China and quarterly results from Dean Foods. On Tuesday (Veterans Day), the stock market is open with D.R. Horton reporting Q3 results. Wednesday, the Street looks at earnings from Abercrombie & Fitch, Macy’s and J. C. Penney along with reports on euro area factory output and U.S. business inventories. Thursday, Janet Yellen speaks at an economic forum at the Federal Reserve, a new initial claims report appears and investors look at new retail sales and manufacturing data from China in addition to earnings from Wal-Mart, Kohl’s, Nordstrom, RE/MAX Holdings and Viacom. Friday, the market reacts to data on October retail sales and September business stockpiles, November’s initial University of Michigan consumer sentiment index, and the latest measures of euro area inflation and GDP.