Dow jumped 124, advancers over decliners 3-1 & NAZ rose 17. The MLP slipped fractionally to 441 & the REIT index went up 1+ to the 266s. Junk bond funds crawled higher & there was some buying in Treasuries. Oil & gold were flattish.
Dow Jones Industrials
Photo: Bloomberg
The jobless rate dropped to a 5-year low of 7% in Nov as employers added more workers than forecast, showing further progress in the labor market. The 203K increase in payrolls followed a revised 200K advance in Oct, the strongest back-to-back gain since Feb-Mar, according to the Labor Dept. The forecast called for a 185K advance. A pickup in employment, combined with faster wage gains & more hours, provides workers with the means to spend. The gain in employment was the biggest in 3 months. Factories took on the most workers since Mar 2012, employment in construction accelerated & payrolls in transportation & warehousing picked up. The Labor Dept household survey showed more people were entering the labor force. The participation rate increased to 63% in Nov. A month earlier it fell to 62.8%, the lowest level since Mar 1978. Private employment, which excludes gov agencies, rose 196K after a revised 214K advance & topped the projected rise of 180K.
Payrolls Rise More Than Forecast as Jobless Rate Falls
Consumer spending in the US rose more than forecast in Oct, a sign the biggest part of the economy is gaining momentum from a firming employment. Household purchases, which account for about 70% of the economy, climbed 0.3% after a 0.2% increase the prior month, the Commerce Dept reported. The estimate called for a 0.2% rise. Incomes dropped 0.1%, reflecting swings in farm revenue. Rising home values & equity prices are giving a lift to households, helping offset the effects of a gov shutdown in Oct & this year’s higher tax rates. Today’s report follows data this week showing household spending up 1.4% in Q3, the smallest advance since early 2009. Retailers reported a lackluster Black Friday start to the holiday shopping season. Household outlays on services rose 0.1% after adjusting for inflation. The category, includes tourism, legal help, health care, & personal care & is difficult for the gov to estimate. Inflation-adjusted spending on durable goods including cars increased 0.8% after falling 1.4%. Purchases of non-durable goods, including gasoline, climbed 0.7%.
Bill Gross, manager of the world’s biggest bond fund, said the pace of payroll growth in Nov signals there a 50% chance the Federal Reserve (FED) will begin tapering its monthly bond purchases this month. “It’s at least 50-50 now,” Pacific Investment Management Co.’s Gross said. “There was some logic for a January starting point, but it’s clear the Fed wants out. The Fed still has to be careful even when they begin to taper,” given the recent pace of growth has produced growth at only about 2% so far, he said. FED policy makers cut rates to a record low as the financial crisis mounted in 2008 & vowed to keep them there until the economy & employment show sustained signs of recovery. The central bank, which has kept its benchmark overnight bank lending rate in a range of zero to 0.25% since Dec 2008, has said it will maintain that rate while unemployment held above 6.5% & inflation stayed below 2.5%. “Most people on the FOMC are worried about the implications for being experimental for so long,” Mohamed El-Erian, who serves as Pimco’s chief executive & as co-chief investment officer with Gross, said. “When you get such a strong report, it makes the normalization process easier.”
Gross Says Job Gains Mean 50% Odds of December Fed Taper
The markets are back to all news is favorable. Good news speaks for itself & bad news isn't really all that bad. While the jobs report was favorable, it gives more of a reason for the FED to starting tapering its bond buying program & the next meeting is Dec 17-18. Meanwhile the budget mess in DC lumbers on which will result in more gov spending cuts if those guys don't come up with a compromise. Dow is still down, more than 100, in Dec.
Dow Jones Industrials
Dow Jones Industrials
Treasury yields:
U.S. 3-month |
0.05% | |
U.S. 2-year |
0.30% | |
U.S. 10-year |
2.85% |
| CLF14.NYM | ...Crude Oil Jan 14 | ...97.44 |  ...0.06 | (0.1%) |
| GCZ13.CMX | ...Gold Dec 13 | ....1,233.90 | ...0.70 | (0.1%) |
Photo: Bloomberg
The jobless rate dropped to a 5-year low of 7% in Nov as employers added more workers than forecast, showing further progress in the labor market. The 203K increase in payrolls followed a revised 200K advance in Oct, the strongest back-to-back gain since Feb-Mar, according to the Labor Dept. The forecast called for a 185K advance. A pickup in employment, combined with faster wage gains & more hours, provides workers with the means to spend. The gain in employment was the biggest in 3 months. Factories took on the most workers since Mar 2012, employment in construction accelerated & payrolls in transportation & warehousing picked up. The Labor Dept household survey showed more people were entering the labor force. The participation rate increased to 63% in Nov. A month earlier it fell to 62.8%, the lowest level since Mar 1978. Private employment, which excludes gov agencies, rose 196K after a revised 214K advance & topped the projected rise of 180K.
Payrolls Rise More Than Forecast as Jobless Rate Falls
Consumer spending in the US rose more than forecast in Oct, a sign the biggest part of the economy is gaining momentum from a firming employment. Household purchases, which account for about 70% of the economy, climbed 0.3% after a 0.2% increase the prior month, the Commerce Dept reported. The estimate called for a 0.2% rise. Incomes dropped 0.1%, reflecting swings in farm revenue. Rising home values & equity prices are giving a lift to households, helping offset the effects of a gov shutdown in Oct & this year’s higher tax rates. Today’s report follows data this week showing household spending up 1.4% in Q3, the smallest advance since early 2009. Retailers reported a lackluster Black Friday start to the holiday shopping season. Household outlays on services rose 0.1% after adjusting for inflation. The category, includes tourism, legal help, health care, & personal care & is difficult for the gov to estimate. Inflation-adjusted spending on durable goods including cars increased 0.8% after falling 1.4%. Purchases of non-durable goods, including gasoline, climbed 0.7%.
Bill Gross, manager of the world’s biggest bond fund, said the pace of payroll growth in Nov signals there a 50% chance the Federal Reserve (FED) will begin tapering its monthly bond purchases this month. “It’s at least 50-50 now,” Pacific Investment Management Co.’s Gross said. “There was some logic for a January starting point, but it’s clear the Fed wants out. The Fed still has to be careful even when they begin to taper,” given the recent pace of growth has produced growth at only about 2% so far, he said. FED policy makers cut rates to a record low as the financial crisis mounted in 2008 & vowed to keep them there until the economy & employment show sustained signs of recovery. The central bank, which has kept its benchmark overnight bank lending rate in a range of zero to 0.25% since Dec 2008, has said it will maintain that rate while unemployment held above 6.5% & inflation stayed below 2.5%. “Most people on the FOMC are worried about the implications for being experimental for so long,” Mohamed El-Erian, who serves as Pimco’s chief executive & as co-chief investment officer with Gross, said. “When you get such a strong report, it makes the normalization process easier.”
Gross Says Job Gains Mean 50% Odds of December Fed Taper
The markets are back to all news is favorable. Good news speaks for itself & bad news isn't really all that bad. While the jobs report was favorable, it gives more of a reason for the FED to starting tapering its bond buying program & the next meeting is Dec 17-18. Meanwhile the budget mess in DC lumbers on which will result in more gov spending cuts if those guys don't come up with a compromise. Dow is still down, more than 100, in Dec.
Dow Jones Industrials
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