Clarksville, TN – Nonfarm payrolls rose more than expected in February, while figures for the two previous months were revised higher. At 228,000, the three-month average has remained strong. The unemployment rate held steady at 4.9%, but labor force participation continued to pick up and the employment/population ratio is trending higher.
Hours fell, likely reflecting bad weather (weakness in hours was concentrated in mining, which includes energy exploration, and construction). Average hourly earnings fell 0.1% (following a 0.5% rise in January), bringing the year-over-year gain down to 2.2% (from 2.5%), but the three-month average was up nearly 2.5% y/y.The other economic data reports were mixed. In the Beige Book, two of the 12 Federal Reserve districts described growth as “moderate,” while others saw things at “modest,” “slight,” “flat,” or “mixed,” and The Kansas City Fed noted “a modest decline” in activity.
The ISM Manufacturing Index remained below the breakeven level in February, but details were not as bad as in January and survey respondents were generally upbeat.
The ISM Non-Manufacturing Index was little changed, consistent with lackluster-to-moderate growth in the overall economy. January foreign trade figures suggested that exports will be a larger drag on GDP growth. The pace of auto sales remained brisk in February.
Next week, the U.S. economic calendar thins out considerably. The focus is expected to be on the European Central Bank’s policy meeting, where officials may once again disappoint market expectations (in this case, more QE or rates pushed further into negative territory).
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.418||1.524|
|Dollars per Euro||1.096||1.108|
|Japanese Yen per Dollar||113.690||120.130|
|Canadian Dollars per Dollar||1.340||1.243|
|Mexican Peso per Dollar||17.923||15.055|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||2.71||2.60|
Treasury Yield Curve – 03/04/2016
As of close of business 03/03/2016
|March 7th||—||Fed Vice Chair Fischer Speaks (macroeconomics)
Fed Governor Brainard Speaks (economic outlook)
|March 8th||—||Small Business Optimism Index (February)|
|March 10th||—||ECB Policy Meeting
Jobless Claims (week ending February 27th)
|March 11th||—||Import Prices (February)|
|March 15th||—||Producer Price Index (February)
|March 16th||—||Consumer Price Index (February)
Building Permits, Housing Starts (February)
Industrial Production (February)
FOMC Policy Decision, Revised Fed Projections
Yellen Press Conference
|March 17th||—||Leading Economic Indicators (February)|
|March 25th||—||Good Friday Holiday (markets closed)|
|April 1st||—||Employment Report (March)|
|April 27th||—||FOMC Policy Decision (no Yellen press conference)|
|June 15th||—||FOMC Policy Decision (Yellen Press Conference)|
US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the US government.
Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments.
Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business March 3rd, 2016.