This Week
We got some major data releases this week, but they all came with a big ol’ asterisk. (And AI spending remained a focus.)
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The economy lost 105,000 jobs* in October and gained 64,000 in November.
*DOGE’s deferred resignations, which paid workers through September, drove a 162,000 decline in federal employment.
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The unemployment rate rose more than expected to 4.6%** in November from 4.4% in September.
**Likely boosted by the government shutdown since 75% of the increase in unemployment was from “temporary layoffs” – the category for furloughed federal workers.
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Retail sales were flat*** in October.
***Spending on autos fell 1.6% m/m after the September expiration of the EV tax credit had pulled forward demand, while lower gas prices contributed to a 0.8% decline in spending at gas stations.
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Headline CPI inflation slowed to 2.7% YoY**** in November from 3.0% in September.
****Two problems: First, the BLS assumed housing costs were flat in October, depressing one of the biggest weights in the CPI. Second, data collection began Nov. 14 due to the government shutdown, so holiday discounts likely depressed prices.
So, for the week, the Nasdaq-100 is up +1% (blue line), and 10-year Treasury yields are down a few bp to 4.15% (black line).
Next Week
Here are the top events I’m watching next week:
- Third-quarter real GDP on Tuesday
- November industrial production on Tuesday
- December consumer confidence on Monday
- October durable goods on Tuesday