Jobs Fall Short

Jobs Fall Short

 

With the end of the government shutdown, investors turned their attention to the economic data. The September Employment report was weaker than expected, while the rest of the data released this week was mixed. As a result, mortgage rates ended the week a little lower.

 

Delayed by the shutdown, the September Employment data was released on Tuesday. Against a consensus forecast of 180K, the economy added just 148K jobs. The Unemployment Rate unexpectedly dropped from 7.3% to 7.2%, the lowest level sinceNovember 2008. The decline was mixed news, though, since it was due to both job gains and to people who left the labor force, meaning that they stopped trying to find a job. Bottom line, the results were weaker than what Fed officials would like to see. Between the ongoinguncertainty about future fiscal policy and the slow pace of improvement in the labor market, investors now expect that the Fed will not begin to taper until at least the March Fed meeting.

 

While the labor market data disappointed investors, the housing market continued to perform well. September Existing Home Sales were just slightly down from the four-year high reached in August, and they were 11% higher than one year ago. Total inventory of existing homes available for sale was unchanged at a five-month supply. Since the Existing Home Sales data is produced by the National Association of Realtors, it was unaffected by the government shutdown. The New Home Sales report, which is produced by the government, is delayed.

 

 

Next week will be packed with economic news, as the calendar includes many reports that were delayed by the shutdown. Wednesday will be the biggest day due to the Fed meeting. Investors will be looking for indications that Fed policy will not change any time soon. The crowded calendar includes Industrial Production and Pending Home Sales on Monday, PPI and Retail Sales on Tuesday, CPI on Wednesday, Chicago PMI on Thursday, and ISM Manufacturing on Friday. And that's not all, as there will be Treasury auctions on Monday, Tuesday, and Wednesday.