US companies added 182,000 jobs last month, according to this morning’s October update of the ADP Employment Report. The gain is in line with expectations and reflects a moderate increase that suggests that the US economy continued to expand at a stable if somewhat diminished rate compared with recent history. But while today’s release implies that US business cycle risk remained low in October, there’s a worrisome trend to consider for the near-term future: the ongoing deceleration in the year-over-year growth rate.
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Backtests have become the weapon of choice for rationalizing various forms of tactical asset allocation, which has become increasingly popular as a risk-management tool since the 2008 crash. The hazards of backtesting—studying how a strategy performed in the past–are well known, which leads some folks to shun the concept entirely. But that’s going too far.
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● Total light-vehicle sales in US rise in October | MarketWatch
● US factory orders fell again in September | Reuters
● Redbook: US chain store sales tick higher in October | DJ
● PMI: Modest growth for Eurozone in composite data for Oct | Reuters
● PMI: UK services sector growth rebounds in Oct | Markit
● PMI: China services sector growth picks up to 3-month high | RTT