

World View & Market Commentary.
Forest first; Trees second.
Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.
Highlights
The headline number for October payrolls was a little disappointing but upward revisions were more than offsetting. Payroll jobs in October posted a gain of 80,000 after rising a revised 158,000 in September (originally 103,000) and increased a revised 104,000 in August (previously 57,000). Market expectations were for a 90,000 boost for the latest month. Revisions for August and September were up net 102,000.
As in recent months, greater strength was seen in private nonfarm payrolls which advanced 104,000, following a 191,000 rise in September and a 72,000 increase in August. The October increase was lower than the market median forecast for a 120,000 increase.
In the private sector, goods-producing jobs were tugged down by construction but with manufacturing and mining partially offsetting. Goods-producing jobs declined 10,000 after a 29,000 boost in September. Construction jobs fell 20,000 in October after rebounding 27,000 the month before. Manufacturing employment gained 5,000 after a 3,000 dip in September. Mining advanced 6,000, following a 4,000 gain the prior month.
Private service-providing jobs rose 114,000 in October, following a 162,000 boost the prior month. The October increase was led by professional & business services (up 32,000) and trade & transportation (up 35,000). The temp help subcomponent of professional & business services rose 15,000 after a 21,000 gain.
The public sector contracted as government employment fell 24,000, following a 33,000 decline in September. Most of the October decrease was in the non-educational component of state government.
Earnings were moderately healthy as average hourly earnings in October rose 0.2 percent, following an upwardly revised 0.3 percent the month before. Analysts had forecast a 0.2 percent increase. The average workweek for all workers in October was unchanged at 34.3 hours. Analysts called for 34.3 hours.
From the household survey, the unemployment rate edged down to 9.0 percent from 9.1 percent in September. The consensus expected 9.1 percent. The unemployment rate declined largely on a sizeable 277,000 boost in household employment which has posted significant increases for three months in a row.
The October employment report is about as expected net. The best news was the upward revisions to payroll employment and the continued gains in household employment. These suggest that there might be a little more momentum than seen in the headline payroll number for October. The upward revisions might also help explain moderate strength in retail sales in recent months.
On the news, equity futures rose somewhat but slipped later.
All “investments” carry some risk, please consult your investment advisor who will tell you that there’s never been a better time to buy, dollar cost average, buy the dips, and oh, look at the shiny new ETF derivative that loses 3% a month even though you bet in the correct direction.
Tokyo Electric Power Co. won approval for a 900 billion yen ($11.5 billion) bailout from the government after the Fukushima nuclear catastrophe to avert bankruptcy and start paying compensation for the crisis.
Trade and Industry Minister Yukio Edano approved the support after the company known as Tepco committed to cutting 7,400 jobs and 2.5 trillion yen in costs. The utility forecast an annual loss of 600 billion yen, its second since the March earthquake and tsunami wrecked its Fukushima nuclear plant.
Scientist Marco Kaltofen Presents Data Confirming Hot Particles from Fairewinds Associates
Highlights
Jobless claims continue to come down but ever so slowly. Initial claims fell 9,000 in the October 29 week to 397,000, a decline partly offset by a 4,000 upward revision to the prior week to 406,000. The four-week average is slowly approaching the 400,000 level, down 2,000 in the week to 404,500. This level is more than 10,000 lower than the month-ago comparison and offers a moderately positive indication for the October employment report.
Continuing claims in data for the October 22 week fell 15,000 to 3.683 million with the four-week average down 10,000 to 3.704 million. A month-to-month comparison shows a roughly 40,000 improvement though declines in continuing claims reflect an uncertain mix of new hiring and benefit expiration. The unemployment rate for insured workers is unchanged at 2.9 percent.
There are no special factors in the data which point to improvement, however slow, in the jobs market. This report, coming ahead of tomorrow's monthly employment report, is likely to be a positive for the stock market through the session.
Highlights
Productivity picked up strength in the third quarter on healthier output. Nonfarm business productivity rebounded an annualized 3.1 percent in the third quarter after dipping 0.1 percent in the previous quarter. The market expectation was for a 2.5 boost for the third quarter. The output component improved to 3.8 percent from 1.8 percent in the second quarter. Hours worked increased an annualized 0.6 percent after a 2.0 percent rise the prior quarter. Unit labor costs fell an annualized 2.4 percent, following a 2.8 percent increase in the second quarter. The consensus forecast was for a 0.7 percent dip.
Compensation growth was soft, rising an annualized 0.6 percent, following a 2.7 percent increase in the second quarter.
Year-on-year, productivity was up 1.1 percent in the third quarter-up from 0.9 percent in the second quarter. Year-ago unit labor costs came in at up 1.2 percent in the second quarter, compared to a rise of 1.8 percent in the prior period.
Today's productivity report is favorable toward a continuation of growth in corporate profits with output up and labor costs down. But the negative is that businesses are still reluctant to hire.
“Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product...if we should judge the United States of America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”
― Robert F. Kennedy
Nov. 1 (Bloomberg) -- The number of Americans receiving food stamps reached a record 45.8 million in August, the government said.
The figure was 1.1 percent higher than the previous month and 8.1 percent more than a year earlier, the U.S. Department of Agriculture said today in a report on its website. Assistance rolls are increasing as joblessness remains at 9.1 percent of the workforce.
Highlights
Purchase applications for home mortgages rose for a second week, up 1.8 percent in the October 28 week on top of the 6.4 percent gain in the October 21 week to nearly reverse the prior week's 8.8 percent drop. The refinance index is down 0.2 percent in the latest week. Rates in the week were little changed with 30-year conforming loans ($417,500 or less) down two basis points to 4.31 percent and 30-year jumbo loans (greater than $417,500) up one basis point to 4.69 percent.
Highlights
Layoff announcements eased in October to 42,759 from an outsized 115,730 in September that included a big cut in the US Army. The October level is near the low end of trend and offers a mildly positive indication for Friday's employment report. Government layoffs fell to 2,785 from September's 54,182 though the report notes the pending risk of big cuts in the postal service. Consumer products show the heaviest layoffs in September with 7,169 followed by retail at 4,254.
"Political expression deserves the highest level of protection and it was unacceptable for the state to suddenly shut down protesters' speech and forcibly oust them from Legislative Plaza that has long been used as a place for peaceful expression," said Hedy Weinberg, executive director at the ACLU of Tennessee.
1. Restore and maintain the proper rule of law by prosecuting systemic financial fraud. Create checks and balances to keep it from happening again.
“Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product...if we should judge the United States of America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”
― Robert F. Kennedy
Highlights
Very strong rates of monthly expansion in the Chicago area extended through October. The Chicago purchasing managers composite index came in at 58.4, well above 50 to indicate monthly expansion in general business activity though at a slightly less robust pace than September's 60.4 level. But October's 58.4 reading, which is four tenths above the Econoday consensus, is impressive and is right at the four-month average of 58.5.
Orders are the most important components and point to very strong production and employment in the months ahead as businesses expand capacity. New orders came in at 61.3, showing monthly expansion against September's outsized 65.3 for one of the strongest monthly rates of expansion of the last six month. Backlog orders rose nearly six points to 51.2 to show a monthly build and to end two months of draws.
Employment is another highlight of October, accelerating 1.7 points to 62.3. Production is also very strong at 63.4. Other readings include a slowing in inventory accumulation, one hinting at a production-related draw, and also include a slowing in supplier deliveries which is consistent with increasing traffic in the supply chain. Prices paid accelerated which is also consistent with strong activity.
The sample of the Chicago report includes businesses from all areas of the economy and continues to show exceptionally healthy conditions. Regional manufacturing reports from the district Federal Reserves have been mixed this month, with some showing a bounce back for expansion but others continuing to show contraction. Stocks are showing no significant early reaction but today's report may help raise confidence for strength in the two ISM reports this week and may help limit losses through the session. The Dallas manufacturing survey will be posted today at 10:30 a.m. ET.
The cost for two parents and two children to live in Seattle has risen 13 percent in the last two years and for single people, it's 19 percent more expensive, according to a University of Washington survey.
The Seattle P-I.com reports the study indicates it costs a single parent of two children in East King County $65,690 to meet basic needs, up 14 percent from 2009.
October 27 – Bloomberg (Katie Spencer): Home prices in the Hamptons, the Long Island beach towns that attract summering Manhattanites, surged 22% in the third quarter from a year earlier as demand climbed for the most expensive properties. The median price of homes sold in the quarter increased to $850,000 from $696,000 in the same period last year…