U.S. Payrolls Grew 156,000, Jobless Rate Rose to 5%
U.S. payrolls grew by a lower-than-forecast 156,000 in September, and the unemployment rate rose to 5.0% from 4.9%. But average hourly earnings rose 0.2% from a month ago, and were up 2.6% from a year ago.
German industrial output beats expectations Results indicate industrial production would increase in the third quarter
German industrial output rose 2.5 per cent in August, a higher rate than expected and the biggest increase since January. (…) That contrasted with a decline of 1.5 per cent in July. (…)
German orders rose by 1% in August, their second monthly gain in a row. It was the first back-to-back monthly gain since November. However neither domestic nor foreign orders have posted monthly gains back-to-back since March for domestic orders and January for foreign orders. The path of year-on-years order gains is still quite muted and its month-to-month success sits on a still-volatile base of domestic and foreign trends.
In the quarter-to-date, overall orders are rising at a 3% annualized pace with foreign orders spurting at a nearly 13% annual rate while domestic orders contract at a nearly 10% annual rate. With such underlying disparate trends, it is hard to confidence in the path for overall orders. Although today’s report is being heralded as a watershed of sorts, that conclusion seems premature. (…)
- Still, Markit saw “solid expansions in output and new orders in September:
- Construction also looks ok.
- As does retailing:
Chinese Cities Restrict Home Purchases to Cool Buying Frenzy Seventeen Chinese cities have imposed restrictions on buying real estate in the past week as China’s leadership tries to cool a home-purchasing frenzy that is sending prices soaring.
EU Slaps Tariffs on China Steel The European Union imposed provisional tariffs on two Chinese steel products as the bloc strives to protect European steelmakers while they struggle with overcapacity.
Currency and credit markets are very volatile:
-
Pound Plummets in Night of Chaotic Trading The British pound tumbled dramatically in chaotic trading that included a flash drop in early Asian hours and sustained falls in London. Late morning in Britain, it was down 3% against the U.S. dollar. -
Rude Awakening on Brexit Sends Pound Tumbling
- Meanwhile, in China, the controlled depreciation continues (my arrow)…
-
Yuan Buckles After China Forex Reserves Drop Again The yuan hit its weakest level against the U.S. dollar since January in offshore trading in Hong Kong after data showed a sharper-than-expected decline in Chinese foreign-exchange reserves.
China’s currency reserves fell by $18.79 billion in September to $3.17 trillion, according to figures from the People’s Bank of China. The drop was larger than the $11 billion fall economists polled by The Wall Street Journal had expected. It followed a drop of $15.89 billion in August and was the largest monthly decline since May. (…)
- …and the USD shots up (charts from The Daily Shot):
- The Ted Spread has also shot up above its level of 2010 and 2011:
- While funding costs keep rising:
-
U.S. Bond Yields Close at Four-Month High Before Jobs Report
-
Gold Falls to New Four-Month Low
-
U.S. Crude Closes Above $50 a Barrel U.S. oil prices closed above the $50 level for the first time since June, as declining U.S. inventories have helped boost a rally that began when OPEC reached a preliminary agreement to cut output last week.
-
OPEC to Discuss Production Cut With Russia
OPEC’s most senior official will discuss the possible participation of Russia in an OPEC production cut next week, officials in the group said this week, as the cartel seeks to bolster a landmark deal in Algiers, reports Benoit Faucon and Summer Said.
MADE IN CHINA
The only thing holding back more sales of Chinese-made cars in the U.S. may be a thin supply chain. General Motors Co. is getting a surprising boost from its decision to ship made-in-China editions of its Buick Envision to U.S. dealerships, the WSJ’s Mike Colias reports, potentially opening a new manufacturing and importing front for U.S. car makers.
The No.1 U.S. auto maker started shipping the Chinese-built automobile to North American dealerships in late spring, but moved carefully with relatively small numbers of the vehicles. Dealers now are clamoring for more after rapid sales of the $40,000 sport-utility vehicle. The made-in-China label is a new one for the U.S. auto industry, which has invested in China even amid persistent concerns over quality.
The sales this year come as criticism of auto companies for manufacturing in Mexico mounts in the presidential campaign. But GM dealers report little concern from shoppers about where the Envision was made, suggesting the strong sales will lead to a boost in production and busier distribution channels. (WSJ)
Wal-Mart Expects Profit Pressures, Fewer New Stores
(…) New store openings in the U.S. will slow significantly. The retailer expects to build 35 new supercenters in fiscal 2018, down from 69 last year.
Even growth of the company’s smaller format Neighborhood Markets will slow, down to 20 new stores in fiscal 2018 from 161 built last year. Over the past four years, the majority of Wal-Mart’s growth has come from new stores, Chief Financial Officer Brett Biggs said Thursday. (…)