US Economy and Credit Markets Ended Oct. 2, 2020

Longer-term U.S. government bond yields rose, and the yield curve steepened somewhat after a number of economic reports were released last week. Personal income fell 2.7% in August from the prior month due to a drop in unemployment benefits as supplemental payments of $600 per week expired on July 31. However, employee compensation rose 1.2% in August compared to July. Consumer spending was up 1% over the prior month, its 4th straight monthly increase, and is now down roughly 2% compared to a year ago. Meanwhile, initial jobless claims for the week ended September 26 were 837,000, which was the 5th consecutive week between 800,000 and 900,0000. However, continued claims, or the number of people already receiving unemployment benefits, fell by nearly 1 million to the lowest level since March. The jobs report released Friday showed the U.S. economy added 661,000 jobs in September, which was below expectations, while the unemployment rate fell to 7.9%. The economy has now recovered about half of the 22 million jobs lost in March and April, adding 11.4 million jobs from May through September. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: August Trade Balance (-$66.0b, -$63.6b); Wednesday: October 2 MBA Mortgage Applications (N/A, -4.8%); Thursday: October 3 Initial Jobless Claims (820k, 837k); Friday: August Final Wholesale Inventories MoM (0.5%, 0.5%).
Posted on Monday, October 5, 2020 @ 8:25 AM

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.