Dow jumped 326, advancers over decliners 5-2 & NAZ gained 86. The MLP index was fractionally lower to the 187s & the REIT index gained 4+ to 483. Junk bond funds were little moved & Treasuries had strong buying. Oil added 1+ to go over 80 & gold rose 7 to 1801.
AMJ (Alerian MLP index tracking fund)
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US employers' hiring surged in Oct as the number of new infections caused by the COVID-19 delta variant slowed & the expiration of extended unemployment benefits moved farther in the rearview mirror. Nonfarm
payrolls increased by 531K workers last month as the unemployment
rate fell 0.2 percentage points to 4.6%, the Labor Dept reported. The forecast called for the addition of
450K jobs & the unemployment rate to slip to 4.7%. The job gains in Sep were revised up to 312K from the prior reading of 194K. The labor market also received a boost as more workers sought jobs
after the $300 per week in supplemental unemployment benefits expired in
Sep. Notable gains occurred in leisure & hospitality,
where the addition of 164K jobs boosted the hiring total in the
sector to 2.4M workers so far this year. Within the space, strong
gains were seen in food services & drinking places (+119K) & in
accommodation (+23K). Professional business services (+100K) & manufacturing (+60K) also showed sizable gains. Average hourly earnings rose 0.4% in Oct & were up 4.9% year
over year. The forecast called for a 0.4% monthly increase & a 4.9%
year-over-year gain. While investors are cheering the report,
some are concerned with the labor force participation holding at 61.6%,
1.7 percentage points below its Feb 2020 level. The rate has
remained 61.4-61.7% since Jun 2020.
US economy adds 531K jobs in October, surging past expectations
The Labor Dept reported 531K positions were created in Oct, an improvement from Sep's 194K. But
to really move the needle, a steady flow of larger numbers is needed,
according to Federal Reserve Chair Jerome Powell who ballparked a
range on Wed. "Once
the delta variant really does continue to decline what’s going to
happen to employment? Are we going to start to see over the winter
significant increases in jobs again? If you look back to 3-6-9 month
average, job creation is between 550,000-600,000 … if we can get back on
that path we would be making good progress," he explained. Job creation was hot in Jun & Jul with 938K & 943K positions
added, but growth tapered to 366K & 312K in Aug &
Sep. This as workers are also quitting in record numbers,
according to the most recent JOLTS report which listed the "quits rate"
at a series high of 2.9%. But hiring remains tough across most industries. Oct's unemployment rate dropped to 4.6% from 4.8% which would be the
lowest since Mar 2020. However some economists suggest that it is falling
because fewer people are looking for work. In Sep 2019, unemployment hit a 50-year low of 3.5%. Months later,
in Mar 2020, the coronavirus pandemic began to shatter the global
economy.
Dem leaders are on track to bring both Pres Biden's social spending bill & the infrastructure bill up for votes today following weeks of intense negotiations with progressive & moderate holdouts. The legislation is expected to outline roughly $1.75T in spending over a 10-year period. When the bill is finalized, the House will debate & vote on the "rule" for the spending bill & then vote on whether to pass the bill itself. House lawmakers will also vote on the infrastructure bill, which is focused on physical projects. The House already debated the infrastructure bill & will likely fast-tracking a final vote. Sen Joe Manchin forced significant cuts to the scope of Biden's spending bill, which originally called for $3.5T in spending on social & climate-related programs. But earlier this week, House Speaker Nancy Pelosi announced a provision for 4 weeks of paid leave, which Manchin opposed, would be added back into the bill. Dem leaders say "pay-fors" included in the bill, such as tax hikes for the wealthiest Americans & enhanced IRS tax enforcement to cover the bill's costs. Reps have universally opposed the bills, arguing that they are fiscally irresponsible & could lead to economic ruin amid rising inflation. If the House votes pass, the "Build Back Better Act" will proceed for a Senate vote. It is still not clear if Manchin & fellow moderate Sen Kyrsten Sinema, the 2 key holdouts, will support the final version of the spending bill. Dem leaders say "pay-fors" included in the bill, such as tax hikes for the wealthiest Americans & enhanced IRS tax enforcement, will cover the bill's costs. Reps have universally opposed the bills, arguing that they are fiscally irresponsible & could lead to economic ruin amid rising inflation.
Dems move full steam ahead with Biden's massive spending plan
As pointed out above, the jobs number is less dramatic when compared with strong months earlier this year. And these numbers bounce around from one month to the next. Meanwhile the Dems are rushing to pass the 2 mega bills in the House. Safe haven gold & Treasuries are also being purchased. All considered, there could be profit taking in the PM.
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