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Bob Carey
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  US Economy and Credit Markets Ended Nov. 1, 2019
Posted Under: Weekly Market Commentary
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United States Treasury yields dropped across the curve as investors took in a plethora of economic data throughout the week. On Wednesday, third quarter real GDP came in at an annual growth rate of 1.9%, beating the consensus expected rate of 1.6%. Consumer spending was the largest positive contributor to growth for the quarter, indicating the continued confidence and purchasing power of the U.S. consumer. Also, on Wednesday, the Federal Reserve cut short-term interest rates by 25 basis points, moving the fed funds rate to the range of 1.50%-1.75%, which was largely expected. More importantly, Federal Reserve Chairman Powell signaled a pause in further rate cuts unless there are material changes in the economic outlook. The week wrapped up with manufacturing and jobs data on Friday. The ISM Manufacturing Index, which is a survey, rose to 48.3 in October, though 0.6 lower than expectations. The data indicated manufacturing activity continued to slow in October, as levels above 50 signals expansion while levels below 50 indicate contraction. October manufacturing data was largely impacted by the GM strike. The strike resulted in 46,000 employees out of work for the month. Friday's jobs report reaffirmed the strength of the U.S. labor market. Nonfarm payrolls rose 128,000 in October, well above the consensus expectation of 85,000. With August and September revisions, nonfarm payrolls were up 223,000. The Unemployment rate rose to 3.6% in October, 0.1% higher than September levels. Labor force participation rose to 63.3%, the highest level since 2013. Average hourly earnings rose 0.2% in the month and are up 3.0% year-over-year. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: September Final Durable Goods Orders (-1.1%, -1.1%), September Factory Orders (-0.5%, -0.1%); Tuesday: September Trade Balance (-$52.5b, -$54.9b), October Final Markit US Services PMI (51.1, 51.0), October Final Market US Composite PMI (n/a, 51.2), October ISM Non-Manufacturing Index (53.4, 52.6); Wednesday: November 1 MBA Mortgage Applications (n/a, 0.6%); Thursday: November 2 Initial Jobless Claims (215k, 218k), October 26 Continuing Claims (1660k, 1690k); Friday: September Final Wholesale Inventories MoM ( -0.3%, -0.3%), November Preliminary University of Michigan Sentiment ( 95.5, 95.5).
Posted on Monday, November 4, 2019 @ 8:00 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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