Even after adjusting for striking GM workers returning to the workforce, labor market dynamics remain robust as the private sector generated 254,000 new jobs in November, fueled by a gain of 206,000 private service sector jobs. Total jobs gains in the month were 266,000; the unemployment rate was 3.5%, a 50-year low. … READ MORE >
Joe Brusuelas
ISM Manufacturing Index continues to contract
The October ISM Manufacturing Index continued to contract in October, though it improved to 48.3 from September’s reading of 47.9, implying a modestly slower pace of contraction in domestic manufacturing sentiment. … READ MORE >
October US employment report: solid trend in hiring continues
The October report continues to imply a period of slower hiring ahead, excluding temporary census workers compared to one year ago which is in line with the overall slower pace of economic activity. The bottom line of the October U.S. employment report is that there is sufficient job creation and wage gains to support growth near the long-term trend of 1.8 % and keep the U.S. some distance from a total economic downturn. … READ MORE >
RSM US Manufacturing Outlook Index remains negative
The RSM US Manufacturing Outlook Index continues to anticipate a slowdown in production, remaining negative in October at -0.59 standard deviations below normal conditions for the manufacturing sector. This is a slight improvement from its September value of -0.79 standard deviations. … READ MORE >
RSM Brexit Stress Index eases amid progress over Northern Ireland
The RSM Brexit Stress Index moved substantially lower after talks between British Prime Minister Boris Johnson and Ireland’s Prime Minister Leo Varadkar were reported to offer options for the transition of Northern Ireland from the common market into Britain’s single market. Though details were still to be worked out, the positive developments allowed negotiations to resume in Brussels over England’s looming departure from the European Union. … READ MORE >
Start watching initial jobless claims as economy slows
Signals implying the slow demise of the decade-long economic recovery include the rising number of claims for unemployment insurance benefits. While we do not believe there is imminent risk of an explosion in demand for first-time benefits, once the pace of firings rises above 250,000 it likely marks an important turning point late in the business cycle. … READ MORE >
RSM Brexit Stress Index higher as global uncertainty hits home
The RSM Brexit Stress Index rose in a week that included the European Union’s rejection of Prime Minister Boris Johnson’s withdrawal proposal and the equity market’s recognition of the adverse effects of disruptions to trade. … READ MORE >
Brexit stress gets reprieve due to Supreme Court ruling
The RSM Brexit Stress Index eased slightly during the week, as Britain’s Supreme Court ordered the resumption of Parliament and restored some sort of order to the Brexit chaos.
The composite index, which measures financial-market stress surrounding Britain’s impending departure from the European Union, closed the week at 1.20 standard deviations above normal levels of stress, down from last week’s close at 1.27. While stress remains high, it has retreated from the extreme levels of earlier this month when a constitutional crisis and a clumsy exit appeared inevitable. … READ MORE >
Economic growth is running out of steam, RSM data shows
So far the domestic economy has absorbed two policy-induced shocks—a trade war with China and the slowing of immigration—and one exogenous oil supply shock that are all contributing to the story of slower growth. Once the economy slows to near 1% next year, recession risks will become elevated. … READ MORE >
Brexit stress rises amid Bank of England’s caution
The RSM Brexit Stress Index rose slightly during a week that included conciliatory tones regarding proposals for a Northern Ireland economic zone, the High Court’s hearings over the suspension of Parliament and the Bank of England warning that continuing anxiety over Brexit and global trade disputes are taking their toll on the economy. … READ MORE >