November 1, 2012

Rates up after mixed but generally positive data

November 1, 2012

Rates up after mixed but generally positive data

Lots of economic news today summarized below. Mortgage bonds (MBS) are down on the day: Fannie Mae 3% and 3.5% coupons lenders uses as rate pricing benchmarks are down 16 and 9 basis points respectively. Rates rise when bond prices drop like this.

ADP Private Jobs (October 2012)

– Private Jobs were +158,000.  Previous was +162,000.

It should be noted that ADP is using a new company with a new model to extract this headline number from their raw data.

Initial Jobless Claims (week ended 10/27)

– 363,000 Initial Claims
– previous revised from 269,000 to 372,000
– 4-week Moving Average 367,250 down from previous 368,750.

Jobs data is still mediocre which, of late, passes for good.  The  storm will likely increase Initial Claims the next couple of weeks and depress 4thQ2012 GDP but see increases in the next quarters.  Flood damage takes time to repair.

Challenger Job-Cut Report (for October 2012)

– 47,724 up from previous 33,816

We are seeing weakness in the world economy and 1) it is being discussed too little and 2) there is little we can do about it.

ISM Manufacturing Index (October 2012)

– Level 51.7. Previous was 51.5.  What is strange is that the regional numbers from the Fed Districts have been weaker than this.

Productivity and Costs (3rdQ2012)

– Nonfarm productivity – Quarter/Quarter +1.9%
– Unit labor costs – Quarter/Quarter  -0.1%

Consumer Confidence  (October 2012)

– Consumer Confidence 72.2 up from 70.3.

This is supposed to measure consumers’ predisposition to spend.