Private nonfarm payrolls in the US are projected to increase 208,000 (seasonally adjusted) in tomorrow’s September update from the Labor Department, according to The Capital Spectator’s median econometric point forecast. The prediction reflects a sharply higher gain vs. the previously reported increase of 134,000 for August.
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Private-sector employment continued to rise at a moderate pace in September, according to this morning’s ADP Employment Report. Last month’s 213,000 increase in jobs (seasonally adjusted) was slightly higher than the consensus forecast, but generally in line with the pace of growth in recent months. In fact, once you consider the year-over-year trend—payrolls advanced 2.2% last month vs. the year-earlier level—today’s release looks a lot like the August report. In other words, the economy continues to create jobs at a steady rate in the low-2% range.
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September was a complete rout. All the major asset classes suffered losses last month—the first calendar month of across-the-board red ink since June 2013.
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The ISM Manufacturing Index is expected to decline slightly to 58.1 in tomorrow’s update for September vs. the previous month, based on The Capital Spectator’s median econometric point forecast. The estimate is still well above the neutral 50.0 mark and so the current outlook remains firmly in growth territory.
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Private nonfarm payrolls in the US are projected to rise 204,000 (seasonally adjusted) in tomorrow’s September update of the ADP Employment Report, based on The Capital Spectator’s median econometric point forecast. The expected monthly gain matches August’s increase.
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The Treasury market’s inflation forecast via 10-year Notes continues to fall and the US stock market has turned wobbly too. That’s a troubling combination… if it continues. The antidote to this mini re-run of heightened disinflation risk is economic growth. This week’s updates on payrolls will stress test the case for expecting moderate growth to roll on, starting with tomorrow’s estimate on private-sector jobs for September via ADP, followed by Friday’s official numbers from the Labor Department. Meantime, Mr. Market is downsizing his outlook for inflation. The yield spread on the nominal 10-year Note less its inflation-indexed counterpart slipped to 1.95% yesterday (Sep. 29)—the lowest in more than a year.
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PIMCO’s star manager, Bill Gross, is moving on to Janus. By some accounts, the Janus brand will be rejuvenated with the arrival of the “bond king,” a moniker earned over a long run of outsized returns in plying the waters of fixed income. But his track record in recent years has looked increasingly wobbly, a familiar strain that tends to arise eventually as the challenge of beating the market rises for everyone through time. The main lesson here, however, is less about quantitative results vs. what might be called manager risk. When your favorite stock picker (or in this case bond picker) abruptly heads for the exit, for whatever reason, dealing with the blowback can be cumbersome.
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Tomorrow’s update on US personal consumption spending for August is projected to rise 0.4% vs. the previous month, based on The Capital Spectator’s median econometric point forecast. The prediction reflects a strong rebound after July’s 0.1% decrease.
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● Open Secret: The Global Banking Conspiracy That Swindled Investors Out of Billions
By Erin Arvedlund
Summary via publisher (Portfolio)
In the midst of the financial crisis of 2008, rumors swirled that a sinister scandal was brewing deep in the heart of London. Some suspected that behind closed doors, a group of chummy young bankers had been cheating the system through interest rate machinations. But with most eyes focused on the crisis rippling through Wall Street and the rest of the world, the story remained an “open secret” among competitors…. Now Erin Arvedlund, the bestselling author of Too Good to Be True, reveals how this global network created and perpetuated a multiyear scam against the financial system. She uncovers how the corrupt practice of altering the key interest rate occurred through an unregulated and informal honor system, in which young masters of the universe played fast and loose, while their more seasoned bosses looked the other way (and would later escape much of the blame). It was a classic private understanding among a small group of competitors—you scratch my back today, I’ll scratch yours tomorrow.
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Looking backward delivered another inspirational session for the bulls in the land of macro today. The US economy grew faster than previously estimated in the second quarter, according to this morning’s revision from the Bureau of Economic Analysis. GDP expanded 4.6% during the three months through this past June (real seasonally adjusted annual rate). That’s the best pace since the end of 2011 and a healthy improvement over last month’s 4.2% gain for Q2. But if growth is picking up, why is Mr. Market’s inflation forecast going down?
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