Economic News
The number of job openings increased by 56000 from the previous month in September 2023. During the month, job openings saw growth in accommodation and food services and in arts, entertainment, and recreation. Job openings declined in other services, the federal government, and information.
This number shows that US companies
continue looking for workers at a relatively high pace, although job
openings have been steadily decreasing since 2022, after the post
COVID-19 reopening. Furthermore, the labor market participation has been
slightly increasing in the last months, which contributes to a
normalization of the labor market.
The ISM Manufacturing PMI slipped to 46.7 in October of 2023, from the 10-month high of 49 in the previous month. This number points to the eleventh consecutive contraction in the US manufacturing sector. The data underscored the impact of higher borrowing costs from the Federal Reserve in the sector, further challenging the resilience of US goods producers from other reports. The contraction in new orders accelerated, with panelists noting lower demand from both domestic and foreign markets. Production slowed, employment contracted, and input prices fell for the sixth straight month, albeit at a lower pace.
Preliminary figures for the third quarter of 2023 show that the GDP in the Eurozone edged up 0.1% year-on-year, the weakest reading since the contractions in 2021, below forecasts. GDP Annual Growth Rate in the Euro Area averaged 1.57 % from 1995 until 2023. In Italy, the GDP is flat, in France it expanded 0.7%, in Spain it grew 1.8%, and in Germany it contracted 0.3%.
The economic sentiment indicator in the Euro Area edged lower to 93.3 in October 2023. This marked the lowest reading since November 2020, as persistent inflationary pressures within the bloc and the European Central Bank's unprecedented policy tightening continued to exert a dampening effect on overall sentiment.
The Federal Reserve Bank of Dallas’s general business activity index for manufacturing in Texas fell to -19.2 in October of 2023, down from -18.1 in the prior month, and marking the 18th consecutive negative reading to suggest a sustained deterioration in business conditions.
A preliminary estimate showed that the German economy contracted by 0.3% year-on-year in the third quarter of 2023, after being unchanged in the preceding three-month period.
Germany GDP has been on a steady decline since summer 2021, and the latest readings point towards Germany entering into recession in the near future.
The Federal Reserve kept the target range for the federal funds rate at its 22-year high of 5.25%-5.5% for a second consecutive time in November, reflecting policymakers' dual focus on returning inflation to the 2% target while avoiding excessive monetary tightening. Policymakers carefully considered a discernible decline in inflation and a gradual slowdown in the labor market, balancing these factors against a series of robust economic indicators, including GDP, retail trade, and housing activity.
The US economy added 150000 jobs in October 2023, about half of a downwardly revised 297000 in September, and below market forecasts. The report showed the labor market is slowly cooling as several strikes including from members of the UAW weighed on the manufacturing payrolls.
The unemployment rate in the United States increased to 3.9% in October 2023, slightly exceeding market expectations and the previous month's figure of 3.8%. This marks the highest jobless rate since January 2022.
The health of the trucking industry is typically a good gauge for how the U.S. economy at large is faring. That’s not the case right now. Economists remain stunned by how much stuff Americans are buying amid historic inflation and interest rate hikes. At the same time, the trucking industry is embroiled in a meltdown that’s slamming operators large and small.
Americans are spending a larger chunk of their
income on durable goods than they did before the pandemic, according to
Goldman Sachs research. The U.S. economy saw “blockbuster” growth in the
third quarter of 2023; it was the biggest surge in nearly two years,
and attributed in part to increased consumer spending. Around 72.6% of
the nation’s freight by weight is hauled by semi-truck. If Americans are
buying so much, why aren’t truckers seeing a boom?
Sources:
https://tradingeconomics.com
https://www.freightwaves.com/news/americans-are-getting-spendy-again-but-its-not-ending-jaw-dropping-trucking-bloodbath?oly_enc_id=0917F6545389D4E
Financial Markets
Week-on-week, the main stock market
indices rised abruptly, with the S&P500 gaining 5.9%, the NASDAQ 100 up 6.5%,
and the RUSSEL 2000 7.6% in the green. Gold is down by 0.7%, and silver gained 0.5%. The barrel of WTI is down 5% and is
now around 81$ per barrel.
Bitcoin rised 0.7% and stabilized around ~34700$.
The relative
strength of the US dollar fell 1.4%. US
bond yields fell considerably, now sitting at 4.57% for the 10-year and 4.77% for the 30-year.
The US bond yield curve remains inverted and is now peaking at 5.48% in 6
months from now.
Comment Section
The beginning of November was marked by the FED decision of holding interest rates at 5.5%, which was interpreted by the market as the end of the hiking cycle. US 10-yier yields dropped way below the 5% mark and stock markets reacted very positively. In a few days we'll have confirmation of the breath of this stock market rally, but if we had to guess, we would say it's not going to be either very long or very exuberant. The mid-term trend is bearish. Take care, and subscribe for more economic news and comments.
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