Overview: Over the past week, the highly anticipated labor market data was pretty close to expectations overall and had just a minor impact. The early election results also caused little reaction, and mortgage rates ended the week nearly unchanged.
The economy gained 261,000 jobs in October, above the consensus forecast of 205,000, but this was the smallest monthly increase since December 2020. The best performing sectors were professional services and healthcare. The unemployment rate rose to 3.7%, above the consensus forecast, and up from 3.5%, which was the lowest level in decades. Average hourly earnings, an indicator of wage growth, were 4.7% higher than a year ago, down from an annual rate of 5% last month. Another strong sector was leisure and hospitality, which posted gains of 35,000 jobs in October. One of the hardest hit sectors during the pandemic, it has rebounded nicely as the economy has recovered. The pace of improvement has slowed, though, from very powerful average monthly gains of 196,000 last year to a still solid 78,000 so far this year. Two other significant economic reports released over the past week from the Institute of Supply Management (ISM) both declined to the lowest levels since May 2020. The ISM Services Index fell to 54.4 and the ISM Manufacturing Index dropped to 50.2. However, readings above 50 indicate that the sectors are still expanding. Continuing the recent trend, the services industries continue to outperform the goods-producing industries.
Core PCE (annual % change)
November 10 — Consumer Price Index (CPI)
November 11 — Mortgage markets closed in observance of Veterans Day
November 16 — Retail Sales report