Week in Review: Oct. 3-7
The Deficit, OPEC, and More
Please read to beat of Fresh Prince of Bel Air: Ok, here’s the situation. We have a little problem I like to call inflation. So just sit right down and read this review, I promise it will just take a minute or two.
Construction spending fell 0.7% in August but is up 8.5% year over year. Residential spending fell 1% for the month but is up 12.4% since August 2021 as higher borrowing costs continue to carve away at the segment’s momentum.
Nonresidential construction spending fell 0.4% for the month but is up 4.7% on a year-ago basis. Manufacturing (+21.5% Y-o-Y) continues to be an outperformer, as does the commercial subsector (+19.1% Y-o-Y), which includes fulfillment/distribution centers.
You can read more of my thoughts on the nonresidential side of this spending report over at Associated Builders and Contractors.
Manufacturing PMI Readings
The S&P Global Manufacturing PMI inched up to 52 in September, just above its August reading of 51.5. Any reading above 50 indicates improvement, so operating conditions in the domestic manufacturing sector got better at a faster rate in September. This has a lot do with declining cost pressures as some input prices begin to fall.
The ISM Manufacturing PMI fell to 50.9 in September, down from 52.8 in August. While the movement is different between the two indicators, they both show that manufacturing activity increased in September. Let’s leave it at that.
Job Openings and Labor Turnover Survey (JOLTS)
Job openings dipped to 10.1 million in August, which is over a million fewer than there were in July but still about 3 million higher than in February 2020. Workers are still quitting (2.7% left their job in August) at a much faster rate than before the pandemic, and employers are still laying people off at a historically low rate (1.0% of all workers were laid off in August).
Still, this suggests weakening demand for labor, which is good news given that we have a little problem that I like to call inflation. The stock market went on a bit of a run in response to the release. Unfortunately, the market puts more weight on the monthly employment report, which would not come for another three days . . . But before Friday, comes, for instance . . .
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