A ton of data today, covering the labor market, conditions in manufacturing and construction, auto sales, and productivity. We also hear from Vice Chairman Yellen, two other members of the FOMC (Gov. Tarullo testifying on mortgage servicing at 10:00; Dallas Fed President Fisher speaking on the economy at 13:00), and the beige book.
The Mortgage Bankers Association’s index of mortgage applications tumbled 16.5%, though all of this was due to a sharp drop in applications for refinancing. The purchase loan index eked out a 1.1% gain on top of the 14.4% surge reported last week…
7:30: Challenger job cuts for Nov….year-to-year decline could disappear. November is traditionally a large month for job cut announcements, as they typically rise about 25% from October. However, last year they fell, as the improvement in economic conditions overrode the seasonal factor. That may happen again, in which case the year-to-year change that crosses the tape would still look substantial—it was almost 32% in October. However, if the seasonal process reasserts itself, then the year-to-year change could drop to a measly 5%-6% decline.
8:15: ADP employment report for Oct…This report (actually a forecast based on ADP data, the prior payroll change, and claims) continues to miss on the low side, by 113k last month and an average of 66k since the last procedural change in December 2008. The median forecast reflects that bias, showing only +70k against a +155k median for the private-sector component of the official data due Friday. While this is larger than the average miss, the last two have been more than 100k off, so analysts appear to be taking that into consideration.
Median forecast (of 40): +70k, ranging from +40k to +125k; last +43k.
8:30: Productivity and costs for Q3…a modest increase. The growth rate for nonfarm output was revised up 0.7 points, as was the growth rate in labor compensation. This implies a firmer productivity figure but no (or very little) change in the flattish reading for unit labor costs in the third quarter. Compensation was also revised up for Q2, so the trend in unit labor costs will look less negative on this account.
For productivity, GS: +2.6%; median forecast (of 66) +2.3%, ranging from +1.9% to +2.8%; last (Q3 prelim) +1.9%.
For unit labor costs, GS -0.1%; median forecast (of 58) -0.2%, ranging from -0.9% to +0.3%; last (for Q3 prelim) -0.1%.
9:10: Federal Reserve Vice Chairman Janet Yellen speaks on “Fiscal Responsibility and Global Rebalancing”…to the Committee for Economic Development in New York. This could pick up on some of the themes discussed by Chairman Bernanke in his recent speech at the European Central Bank.
10:00: ISM manufacturing index for Nov…steady and sturdy? With most regional surveys showing robust growth in manufacturing, we think the ISM manufacturing index will hold onto last month’s gain.
GS: 57; median forecast (of 82) 56.5, ranging from 54 to 58.1, last 56.9.
10:00: Construction outlays for Oct…flat or down? We expect an increase in construction outlays but do not hold this view with strong conviction. Other forecasts are biased toward a slight decline.
GS: +1.2%; median forecast (of 53): -0.3%, ranging from -1.0% to +1.2%; last +0.5%.
11:00: POMO... $7-9 billion of 6/30/2016 – 11/30/2017 bond to be bought back. CUSIP PK0 issued a week ago will likely be a dominant buyback issue.
12:00: New York Fed discloses bail out data... Our own perfectly legal Julian Assage-style data dump.... Forensic financiers will be busy for days going through this data trove
14:00: Federal Reserve beige book…Most of the news since the last report has been at or above expectations, so this one should have a more upbeat tone. The Cleveland Fed is due for the summary.
Late morning/early afternoon: Lightweight vehicle sales for Nov…slowly grinding higher? Anecdotal reports from the manufacturers suggest little change from the October levels.
For total sales: median forecast (of 43): 12.1mm, ranging from 11.7mm to 12.5mm; last: 12.25mm.
For domestic: median forecast (of 20): 9.0mm, ranging from 8.8mm to 9.2mm; last 9.27mm.
From Goldman and Zero Hedge