US Stocks rose modestly again this week encouraged by Friday’s strong November employment report. Treasury bonds fell for the same reason as traders anticipated the FEDs first increases in short term rates next year. There was a significant disappointment in Europe as the ECB delayed making a decision on stimulus until after the first of the year.
In particular this week:
- The Institute for Supply Management reported a number of 58.7, more than expected, but slightly lower than October’s number of 59.0. Anything over 50 indicates expansion.
- China’s official purchasing managers index fell to 50.3 in November from 50.8 in October, below expectations. Anything over 50 indicates expansion.
- The Labor Department reported that US worker productivity increased at 2.3% annual pace in the third quarter, more than the initial estimate of 2.0%.
- The Institute for Supply Management reported that its U.S. non-Manufacturing purchasing managers’ index rose to 59.3 in November from 57.1 in October.
- The Labor Department reported that initial claims for unemployment fell 17,000 in the prior week to 297,000 slightly worse than expectations. The four week moving average of claims rose to 299,000. This is the longest stretch of first time claims below 300,000 since 2006 and the U.S. labor market has now experienced the longest stretch of job creation since World War II.
- The Labor Department also reported that 321,000 jobs were created in November much more than the 230,000 expected. They also revised up the readings for September and October by 44,000 jobs. The unemployment rate was unchanged in November at 5.8%. So far 2014 is the strongest year for job growth since 1999.
- The Commerce Department reported that the US trade deficit fell 0.4% in October to a seasonally adjusted 43.43BN larger than expected. Exports increased 1.2% led mainly by the volatile civilian aircraft and electrical equipment. Exports of fuel oil and food were weaker.