Dow lost 24, decliners over advancers 2-1 & NAZ gave back 8. The MLP index retreated 2+ to the 284s & the REIT index fell 2+ to 351. Junk bond funds slid lower & Treasuries were sold again. Oil is back in the 49s & gold was off 7 to 1266.
AMJ (Alerian MLP Index tracking fund)
The number of workers on US payrolls declined last month for the first time since 2010, reflecting major disruptions from hurricanes Harvey & Irma, Labor Dept figures showed. The jobless rate fell to a new 16-year-low while wage gains accelerated. Payrolls fell 33K (est. up 80K) after 169K advance; revisions subtracted combined 38K in Jul-Aug. Unemployment rate, derived from a separate Labor Dept survey of households, dropped to 4.2% (est. 4.4%) from 4.4%; lowest since 2001. Average hourly earnings rose 0.5% M/M (est. up 0.3%) after 0.2% rise; up 2.9% Y/Y (est. 2.6%); Jul-Aug. figures revised upward. About 1.47M people were unable to work due to bad weather, most since 1996. The hurricanes had a “net effect” of reducing nonfarm payrolls in Sep, while there was “no discernible effect” on the national unemployment rate, the Labor Dept said. Data-collection rates “generally were within normal ranges” for both surveys that produce the figures. Restaurants & bars, an industry where most workers only get paid if they show up to work, had a 105K drop in payrolls. The numbers reflect Harvey's impact on Texas in late Aug & Irma's fallout in Florida in Sep. Data on the labor market & the rest of the economy may be volatile for several months as the weather effects wash out & rebuilding picks up. Puerto Rico, which isn't included in payrolls.
U.S. Payrolls Fall 33,000 on Storms; Jobless Rate at 4.2%
German factory orders rose sharply in Aug, driven by both foreign & domestic demand, in a strong sign for the country's industrial activity. The Economy Ministry reported that industrial orders rose 3.6% in Aug over the previous month, following a 0.4% drop in Jul. Domestic orders rose 2.7% while foreign orders grew 4.3% , powered by a 7.7% increase in orders from non-eurozone countries. Orders from within the eurozone fell 1%.
Pres Trump will host a roundtable with American manufacturers, where he is expected to continue advocating for the GOP's tax reform effort as Congress takes its first steps toward advancing the overhaul. Trump will be joined by execs & workers from companies headquartered in West Virginia & Maryland. The pres will declare Oct 6 “National Manufacturing Day” concordant with the administration's efforts to revitalize the sector. Manufacturing optimism has continued to hover near record highs, registering its highest 3-qtr average in the most recent National Association of Manufacturers survey. While 89.8% of companies said they had a positive outlook for their own company, more than 87% of survey respondents thought the GOP's tax reform plan would address their concerns with the current tax system. The GOP has focused heavily on the manufacturing sector in its campaign to overhaul the US tax code, with House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell & the pres visiting different factories around the country to tout the plan's potential benefits for corps & workers. One key component of the blueprint is a 15 percentage point reduction in the corp tax rate, which would slash the current 35% level to 20%. White House officials have said, in addition to creating jobs & attracting investment, this would boost worker pension plans through a rise in stock prices. Congress took a step toward passing tax reform yesterday, when the House of Representatives approved the 2018 budget resolution. The budget contains the reconciliation mandate for tax reform, which will allow the Rep Party to use the fast-track process when it votes to approve the legislation later this year. It also sets aside money for tax cuts. Trump applauded the GOP's efforts, calling it “a pathway to fix our rigged and burdensome tax code.” The budget resolution is expected to pass both chambers in late Oct or early Nov, after which the GOP will introduce the tax reform bill for discussion.
While the jobs report was weaker than expected, it was not really a great surprise following the 2 storms last month. That effect will not last with rebuilding already underway. More orders will be coming from Puerto Rico & they can further benefit the economy. As shown above, corp execs are very optimistic about the economy & are looking forward to tax relief. The popular stock averages remain essentially at record highs.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 49.55 | -1.24 | -2.4% |
| GC=F | Gold | 1,263.30 | -9.90 | -0.8% |
The number of workers on US payrolls declined last month for the first time since 2010, reflecting major disruptions from hurricanes Harvey & Irma, Labor Dept figures showed. The jobless rate fell to a new 16-year-low while wage gains accelerated. Payrolls fell 33K (est. up 80K) after 169K advance; revisions subtracted combined 38K in Jul-Aug. Unemployment rate, derived from a separate Labor Dept survey of households, dropped to 4.2% (est. 4.4%) from 4.4%; lowest since 2001. Average hourly earnings rose 0.5% M/M (est. up 0.3%) after 0.2% rise; up 2.9% Y/Y (est. 2.6%); Jul-Aug. figures revised upward. About 1.47M people were unable to work due to bad weather, most since 1996. The hurricanes had a “net effect” of reducing nonfarm payrolls in Sep, while there was “no discernible effect” on the national unemployment rate, the Labor Dept said. Data-collection rates “generally were within normal ranges” for both surveys that produce the figures. Restaurants & bars, an industry where most workers only get paid if they show up to work, had a 105K drop in payrolls. The numbers reflect Harvey's impact on Texas in late Aug & Irma's fallout in Florida in Sep. Data on the labor market & the rest of the economy may be volatile for several months as the weather effects wash out & rebuilding picks up. Puerto Rico, which isn't included in payrolls.
U.S. Payrolls Fall 33,000 on Storms; Jobless Rate at 4.2%
German factory orders rose sharply in Aug, driven by both foreign & domestic demand, in a strong sign for the country's industrial activity. The Economy Ministry reported that industrial orders rose 3.6% in Aug over the previous month, following a 0.4% drop in Jul. Domestic orders rose 2.7% while foreign orders grew 4.3% , powered by a 7.7% increase in orders from non-eurozone countries. Orders from within the eurozone fell 1%.
Germany sees strong growth in factory orders in August
Pres Trump will host a roundtable with American manufacturers, where he is expected to continue advocating for the GOP's tax reform effort as Congress takes its first steps toward advancing the overhaul. Trump will be joined by execs & workers from companies headquartered in West Virginia & Maryland. The pres will declare Oct 6 “National Manufacturing Day” concordant with the administration's efforts to revitalize the sector. Manufacturing optimism has continued to hover near record highs, registering its highest 3-qtr average in the most recent National Association of Manufacturers survey. While 89.8% of companies said they had a positive outlook for their own company, more than 87% of survey respondents thought the GOP's tax reform plan would address their concerns with the current tax system. The GOP has focused heavily on the manufacturing sector in its campaign to overhaul the US tax code, with House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell & the pres visiting different factories around the country to tout the plan's potential benefits for corps & workers. One key component of the blueprint is a 15 percentage point reduction in the corp tax rate, which would slash the current 35% level to 20%. White House officials have said, in addition to creating jobs & attracting investment, this would boost worker pension plans through a rise in stock prices. Congress took a step toward passing tax reform yesterday, when the House of Representatives approved the 2018 budget resolution. The budget contains the reconciliation mandate for tax reform, which will allow the Rep Party to use the fast-track process when it votes to approve the legislation later this year. It also sets aside money for tax cuts. Trump applauded the GOP's efforts, calling it “a pathway to fix our rigged and burdensome tax code.” The budget resolution is expected to pass both chambers in late Oct or early Nov, after which the GOP will introduce the tax reform bill for discussion.
Trump hosts manufacturers as tax reform faces first hurdle in Congress
While the jobs report was weaker than expected, it was not really a great surprise following the 2 storms last month. That effect will not last with rebuilding already underway. More orders will be coming from Puerto Rico & they can further benefit the economy. As shown above, corp execs are very optimistic about the economy & are looking forward to tax relief. The popular stock averages remain essentially at record highs.
Dow Jones Industrials
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