Shelter Six:  The Economy Added 250K Jobs in October

November 5, 2018 by · Leave a Comment 

1. The strong economy just keeps rolling along as evidenced by Friday’s Employment Report, which showed the economy adding 250K jobs in October!

2. The U.S. has now averaged 211K new jobs per month over the past year, while Unemployment has dropped to only 3.7%, the lowest level since 1969.

3. Average Hourly Earnings are also finally rising and were 3.1% higher than a year ago, the largest annual rate of increase since 2009.

4. A real strong economy often leads to high inflation, but key inflation data released last week showed inflation holding steady right at the Fed’s stated target level of 2%.

5. Fed Chair Powell thinks that the country could be at a “unique” time in its history with a “remarkably positive outlook” and that he expects unemployment to remain below 4% and inflation around 2% through the end of 2020.

6. Goldman Sachs economists were also upbeat adding there is not much sign of recession in the next three years and giving only a 36% chance of recession during that time.

Rate Update

The strong employment report influenced rates higher last week.  Look for rates to stay above 5% or go higher unless there is surprisingly weak economic data, a big downturn in stocks, or an unexpected headline that implies big economic risks.

This Week

The ISM National Services Index is due out on Monday and the JOLTS report on Tuesday.  The Fed meets again on Thursday but no change in rates is expected.