Weekly Market Update | Week 5, 2024

Key Takeaways

  • Job Growth Accelerates
  • Meta Adds a Dividend

January headline payrolls of 353K well ahead of consensus 177K, highest since Jan-23, while prior two months revised up combined 333K. Average hourly earnings up 0.55% m/m, above consensus 0.3%, highest since Mar-22. Annual AHE up 0.4pp to 4.48% y/y, above 4.1% consensus and highest since September. 

Prime-age employment-to-population rebounded, up 0.2pp to 80.6% after December lowest since Jan-23. However average workweek fell 0.2 to 34.1, which economists said could suggest labor hoarding, though could also reflect harsh January weather. Also flagged 31K decline in employment level in household survey, which was third decline in past four months.

Economists also noted some messiness from revisions, including average 18K decline per month in year to Mar-23, though offset by average upward revision of 42K since. From a Fed perspective, hot print drove market pricing toward shallower path of cuts this year.

However, some economists again pointed to Fed Chair Powell’s comment this week that the Fed doesn’t need to see labor market weakness before cutting.

Fixed Income

Yield Curve

Dec FOMC Statement      Balance Sheet Reduction Plan       Credit, Liquidity and Balance Sheet    Federal Reserve Dot Plots  

Treasury.gov yields    FOMC Policy Normalization Statement     Longer- Run Goals Jan 2022

Foreign Exchange Market

Energy Complex 

The Baker Hughes rig count was down 2 this week. There are 619 oil and gas rigs operating in the US – Down 140 from last year.

Metals Complex 

Employment Picture 

January Jobs Report –  BLS Summary – Released 2/2/2024 –  The US economy added 353k nonfarm jobs in January and the Unemployment rate was unchanged at 3.7%. Average hourly earnings increased 19 cents to $34.55.  Hiring highlights include +74k Professional and Business Services, +70k Healthcare, and +45k Retail Trade.

  • Average hourly earnings increased 19 cents/0.6% to $34.55.
  • U3 unemployment rate was unchanged at 3.7%. U6 unemployment rate increased 0.1% to 7.2%.
  • The labor force participation rate was unchanged at 62.5%.
  • Average work week decreased 0.2 to 34.1 hours.

Weekly Unemployment Claims – Released Thursday 2/1/2024 – In the week ending January 27, the advance figure for seasonally adjusted initial claims was 224,000 an increase of 9,000 from the previous week’s revised level. The 4-week moving average was 207,750 an increase of 5,250 from the previous week’s revised average.

Employment Cost Index – Released 1/31/2024 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2023. The 12-month period ending in December 2023 saw compensation costs increase by 4.2. The 12-month period ending December 2022 increased 5.1%. Wages and salaries increased 4.3 percent over the 12-month December 2023 and increased 5.1 percent for the 12-month period ending in December 2022. Benefit costs increased 3.8 percent over the 12-month period ending December 2023 and increased 4.9 percent for the 12-month period ending in December 2022. This report is published quarterly.

Job Openings & Labor Turnover Survey JOLTS – Released 1/30/2024 – The number of job openings changed little at 9.0 million on the last business day of December, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed 5.6 million and 5.4 million, respectively. Within separations, quits (3.4 million) and discharges (1.6 million) changed little.

This Week’s Economic Data

U.S. Construction Spending– Released 2/1/2024 – Construction spending during December 2023 was estimated at a seasonally adjusted annual rate of $2,096.0 billion, 0.9 percent above the revised November estimate of $2,078.3 billion. The December figure is 13.9 percent above the December 2022 estimate of $1,840.9 billion.

PMI Manufacturing Index – Released 2/1/2024 – The January Manufacturing PMI registered 49.1 percent, up 2.0 percent from December. The manufacturing sector continued in contraction for the 15th consecutive month following one unchanged month and 28 months of growth prior to that. The New Orders Index entered expansion territory at 52.5 percent, 5.5 percentage points higher than the figure of 47.0 percent recorded in December. The Production Index reading of 50.4 percent is a 0.5-percentage point increase compared to December’s figure of 49.9 percent.

Chicago PMI – Released 1/31/2024 – Chicago PMI remained in contraction territory in January unexpectedly declining to 46.0 points down from 47.2 points in December. The contraction follows a contraction in December which follows one month of expansion and follows 14 consecutive months of contraction in business activity in the Chicago region.

Consumer Confidence– Released 1/30/2024 – Consumer Confidence increased in January, up to 114.8 from 108.0 in December. Expectations increased from 81.9 to 83.8. January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions.

Recent Economic Data

US Light Vehicle SalesReleased 1/26/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.893 million units in December.

Personal Income – Released 1/26/2024 – Personal income increased $60.0 billion (0.3 percent at a monthly rate) in December. Disposable personal income (DPI) increased $51.8 billion (0.3 percent). Personal consumption expenditures (PCE) increased $133.9 billion (0.7 percent).

New Residential Sales – Released 1/25/2024 – Sales of new single‐family houses in December 2023 were at a seasonally adjusted annual rate of 664,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 8.0 percent above the revised November rate of 615,000 and is 4.4 percent above the December 2022 estimate of 636,000. The median sales price of new houses sold in December 2023 was $413,200.  The average sales price was $487,300.  At the end of December, the seasonally adjusted estimate of new homes for sale was 453,000, a supply of 8.2 months at the current sales rate.

Durable GoodsReleased 1/25/2024 – New orders for manufactured durable goods in December, up three of the last four months, increased $0.1 billion or virtually unchanged to $295.6 billion, the U.S. Census Bureau announced today. This followed a 5.5 percent November increase. Excluding transportation, new orders increased 0.6 percent. Excluding defense, new orders increased 0.5 percent. Primary metals, also up three of the last four months, drove the increase, $0.4 billion or 1.4 percent to $27.1 billion.

Advance Estimate of 4th Quarter 2023 GDP – Released 1/25/2024 – Real gross domestic product (GDP) surpassed expectations and increased at an annual rate of 3.3 percent in the fourth quarter of 2023, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent. The GDP “advance” estimate is based on source data that are incomplete or subject to further revision. The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Existing Home Sales Released 1/19/2024 – The Existing home sales decreased in December following an increase in November which followed five consecutive months of declines. Existing home sales in December decreased 1.0% from November and fell 6.2% year over year. Existing home sales decreased to 3.78 million in December seasonally adjusted. The median price of exiting homes for sale increased to a record high of $389,800.

Housing Starts – Released 1/18/2024  December housing starts came in at 1,460,000, 4.3% below the November estimate but is 7.6% above the December 2022 rate. Building permits were 1.9% above the November rate at $1,495,000 and 6.1% above the December 2022 rate.

Industrial Production and Capacity Utilization – Released 1/17/2024 – Industrial production increased 0.1% in December and declined 3.1% in the fourth quarter. Manufacturing increased 0.1%. Utilities output decreased 1.0%. Mining increased 0.9%. Capacity utilization was unchanged in December, a rate that is 1.1 percent below its long-run average.

Retail Sales – Released 1/17/2024 – Headline retail sales increased 0.6% in December and are up 5.6% above December 2022.

Producer Price Index – Released 1/12/2024 – The Producer Price Index for final demand declined 0.1 percent in December, seasonally adjusted. Final demand decreased 0.1 percent in November. On an unadjusted basis, the index for final demand moved up 1.0 percent for the 12 months ended in December.

Consumer Price Index Released 1/11/2024 – The Consumer Price Index for All Urban Consumers increased 0.3 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.

U.S. Trade Balance – Released 1/9/2024 –  The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $63.2 billion in November, down $1.3 billion from $64.5 billion in October. November exports were $253.7 billion, $4.8 billion less than October exports. November imports were $316.9 billion, $6.1 billion less than October imports. The November decrease in the goods and services deficit reflected an decrease in the goods deficit of $0.6 billion to $89.4 billion and an increase in the services surplus of $0.7 billion to $26.2 billion.

Consumer Credit – Released 1/8/2024 – Consumer credit increased at a seasonally adjusted annual rate of 5.7 percent in November. Revolving credit increased at an annual rate of 17.7 percent, while nonrevolving credit increased at an annual rate of 1.5 percent.

PMI Non-Manufacturing IndexReleased 1/5/2024 – Economic activity in the services sector expanded in December for the twelfth consecutive month as the Services PMI® registered 50.6 percent, 2.1 percentage points lower than November’s reading of 52.7 percent.

Next week we get data on the Services PMI, Consumer Credit, and U.S. Trade Balance.


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Data Sources: 

Conference Board Economic Indicators   Bureau of Economic Analysis (BEA)   Congressional Budget Office (CBO)     U.S. Bureau of Labor Statistics (BLS)    Federal Reserve Economic Data (FRED Charts)

CME Fed Watch   U.S. Treasury – Yields   U.S. Census Bureau    Institute for Supply Management (ISM)    Weekly DOL Employment Data    BLS Monthly Jobs Report    JOLTS      All capital in one visualization 2020

US Energy Admn (EIA)   BLS Consumer Price Index CPI      BLS Producer Price Index PPIAtlanta Fed GDPNOW    NY Fed Nowcast GDP     US Census Bureau Housing Starts   U.S. Energy Admn

Consumer Credit  USCB Retail Sales   Construction Spending      Federal Reserve Dot Plots 2017   NY Empire Index    Philadelphia Federal Reserve   P/E Ratio Data -Yardeni Research

Technical Analysis Info: Koyfin.com  StockCharts.com – Financial Charts    Exponential vs Simple Moving Average

Other links: 1973 Arab Oil Embargo    Hunt Brothers Silver    Asian Contagion   Long-Term Capital bailout