Companies added more workers to payrolls in February, the Labor Dept. reports. Private-sector payrolls increased 227,000 last month, modestly higher than January’s revised 221,000 advance. A second month of robust expansion of the labor market gives the Federal Reserve another reason to hike rates at next week’s monetary policy meeting. But while the monthly change has rebounded this year after weak growth in 2016’s third quarter, the year-over-year trend was unchanged last month, holding at a relatively subdued increase.
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The 10-year Treasury yield ticked up to 2.60% on Thursday… again. The benchmark rate reached that level in December (the highest since 2014) following the reflationary wave that followed Donald Trump’s election victory. But yields pulled back in 2017… until yesterday.
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There are no guarantees when predicting Federal Reserve monetary policy decisions. But yesterday’s surprisingly strong increase in US private payrolls in February by ADP’s reckoning gives the hawks a potent new data point to make the case for squeezing monetary policy at next week’s FOMC meeting.
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US companies added workers at a blistering pace in February, according to the ADP Employment Report. Private payrolls increased 298,000, far above the 183,000 consensus forecast via Econoday.com. The gain is the strongest monthly increase in nearly three years. Today’s update also lifted the year-over-year trend in payrolls for the second straight month. If the bullish data is confirmed in Friday’s official jobs report from Washington, the news will further boost confidence for expecting that the Federal Reserve will raise interest rates at next week’s monetary policy meeting.
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Yes, according to Tuesday’s revised GDP estimates from the Atlanta Fed and CNBC’s Rapid Update survey data. The Capital Spectator’s new economic projection is also anticipating a weaker pace of growth vs. last year’s fourth quarter. It’s too early to say for sure if the weaker forecasts are accurate (quite a lot of Q1 data is still a mystery at this point). But it’s fair to say that the prospects for a robust firming in the macro trend in the kick-off to 2017 is looking a bit wobbly compared with the previous review of GDP estimates from two weeks ago.
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The bullish trend in financial companies remains intact through early March, based on trailing one-year returns via a set of proxy ETFs. Although all ten sectors of the US equity market are posting gains for the 12-month comparison, financial shares enjoy a sizable lead over the rest of the field.
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Powered by modest gains last week in US and developed-market stocks, an investable version of the Global Market Index (an unmanaged benchmark that holds all the major asset classes in market-value weights) inched up 0.1% in the first week of March. The benchmark has advanced in every week since late January — the longest run of non-stop weekly gains in more than two years.
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● The Complacent Class: The Self-Defeating Quest for the American Dream
By Tyler Cowen
Q&A with author via NPR
In a new book, The Complacent Class, economist Tyler Cowen argues that the United States is standing still. People have grown more risk averse and are reluctant to switch jobs or move to another state, he says, and the desire to innovate — to grow and change — has gone away. In an interview with NPR’s Rachel Martin, Cowen says he’s worried that more and more communities are self-segregating — by income, education or race.
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Talk may be cheap, but the steady stream of hawkish comments from Fed officials in recent days has convinced the crowd that a rate-hike announcement is likely at the central bank’s monetary policy meeting scheduled for Mar. 14-15.
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The expected risk premium for the Global Market Index (GMI) increased sharply in February. GMI, an unmanaged market-value weighted mix of the major asset classes, is currently projected to earn an annualized 4.9% over the long term – well above last month’s 4.3% estimate.
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