Today’s September employment report from the Labor Department has been postponed and rescheduled (maybe) for release down the road. The source of the delay, of course, is the ongoing shutdown of the federal government, courtesy of the budget battle in Congress. As a result, the official data remains a mystery at the moment, but that doesn’t stop us from considering the published numbers from other sources in an effort to develop some perspective on last month’s labor market profile. For instance, this week’s updates on the manufacturing and services sectors from the Institute for Supply Management offer useful proxies for inferring the hard data on payrolls. In particular, the employment components in the ISM Manufacturing and Non-Manufacturing reports are especially valuable.
Jobless Claims Stick Close To A 7-Year Low
The government’s employment report for September that’s theoretically due for release tomorrow will probably remain a mystery this week, courtesy of the government shutdown. In contrast, today’s weekly update on jobless claims has been spared Washington’s axe of fiscal mayhem, at least for this week. New filings for jobless benefits inched higher by 1,000 in today’s report, settling at a seasonally adjusted 308,000 for the week through September 28. Apparently some corners of the Labor Department are better than others at dispensing economic numbers when Congress is suffering from a fiscal hissy fit. In any case, the key takeaway in the data du jour is that claims continue to bump around at levels within shouting distance of a seven-year low. An even stronger message in today’s release is the news that the year-over-year rate of decline is still running at relatively deep levels, which is an unequivocally bullish sign for anticipating the near-term trend for the labor market.
US Nonfarm Private Payrolls: September 2013 Preview
The Labor Department’s employment report for September, officially scheduled for release tomorrow, October 4, will be postponed because of the government shutdown. But assuming that the data will be published at some point, private nonfarm payrolls in the US are projected to increase 192,000 (seasonally adjusted) in the September update from the Labor Department, according to The Capital Spectator’s average econometric point forecast. The projected gain is substantially higher than the previously reported increase of 152,000 for August. Meanwhile, The Capital Spectator’s average projection for September is moderately above a pair of consensus forecasts for private payrolls, based on surveys of economists.
ADP: Private Payrolls Rose 166k In September
Private payrolls increased 166,000 last month on a seasonally adjusted basis, according to today’s release of the ADP Employment Report. That’s a bit more than August’s 159,000 advance, although the pace remains sluggish compared with recent history in terms of monthly comparisons. On a brighter note, the year-over-year change in private payrolls turned higher again in September, rising 1.88% last month vs. the year-earlier level. That’s the fifth straight month of improvement for the annual rate of increase, according to ADP numbers. As a result, last month’s year-over-year gain is the highest in more than a year. Overall, the ADP data implies that Friday’s official payrolls report from the government would also dispatch slightly better numbers from the previous month… if the report was released. Thanks to the government shutdown, however, Friday’s Labor Department update looks set to remain a mystery until further notice.
Who Moved My Economic Data?
One of the victims of the federal government’s shutdown is the delay of economic reports. Analyzing the business cycle is hard enough under normal circumstances, but let’s see what happens as we try to dissect the macro tea leaves with a bout of partial blindness for an indeterminate amount of time. That includes going dark on Friday’s September payrolls report, which had been scheduled for release by the Labor Department but is now postponed until further notice. All the more reason to focus on today’s ADP Employment Report, which may end up as the only number available this week for analyzing changes in September’s payrolls.
ISM Mfg. Index Rises In September. On The Other Hand…
The modest rise in the ISM Manufacturing Index in today’s September update surprised most economists, based on consensus forecasts that anticipated a decline. But the advance to 56.2 last month–the fourth consecutive gain for this benchmark–matched yesterday’s average econometric projection via The Capital Spectator. More importantly, this early look at September’s macro profile suggests that economic growth remains the prevailing wind for evaluating the business cycle. Assuming, of course, the fiscal follies in Washington don’t roll on for too long and bite too deeply.
Major Asset Classes | September 2013 | Performance Review
The global markets rebounded sharply in September, with most of the major asset classes posting handsome gains. The main exception: broadly defined commodities, which retreated nearly 3%. Otherwise, there was a bull-market party across the board at the finale for the third quarter, led by a potent 8.6% rise last month in foreign real estate/REITs. In fact, foreign assets in unhedged US dollar terms generally fared quite well in September, including a strong revival in emerging markets equities, which advanced 6.5%–the best month for this slice of global equities in more than a year. Unsurprisingly, the Global Market Index—an unmanaged, market-weighted benchmark of all the major asset classes—earned a handsome gain in September, rising 3.9%. That’s the best monthly increase for GMI since January 2012.
Flirting With Economic Insanity
Unless Congress gets its act together soon—today—it looks like we’re headed into a black hole of economic uncertainty. The two crunch dates on the horizon: tomorrow, October 1, when a potential shutdown of the federal government begins if the enlightened pols in Washington don’t come to an agreement on the budget real quick. But that’s small potatoes compared with October 17, when the government may slide into a technical default if Congress doesn’t raise the budget ceiling and agree to finance the spending bills that have already been debated and enacted. No one’s really sure what all this means if one or both of these self-inflicted financial traumas come to pass. But you don’t have to be a genius to recognize that the potential for trouble will rise the longer these risks are allowed to fester. Welcome to the increasingly bizarre new world of dysfunctional democracy in these United States.
ISM Manufacturing Index: September 2013 Preview
The ISM Manufacturing Index is expected to increase to 56.2 in tomorrow’s September update (scheduled for release on October 1), based on The Capital Spectator’s average econometric forecast. The estimate reflects a slight rise from the previously reported 55.7 for August. Meanwhile, the Capital Spectator’s average projection is moderately higher than three consensus forecasts for September via surveys of economists. In fact, these surveys anticipate that today’s ISM number will decline vs. the previous month, in contrast with The Capital Spectator’s projection for a small increase.
Book Bits | 9.28.13
● The Age of Oversupply: Overcoming the Greatest Challenge to the Global Economy
By Daniel Alpert
Adaptation via PBS Newshour
What we have seen in the past few decades is an unprecedented global explosion of cheap labor and cheap money. This trend is a huge driver of the developed world’s economic problems. Yet most policy makers, not to mention ordinary citizens, barely understand what has happened and, worse, many political leaders, economists, and think tanks still embrace a set of solutions to today’s economic malaise that aims to create even more supply — call them supply-side zombies if you will.
