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January Retail Sales and Import and Export Prices

KEY DATA: Sales: +0.2%; Control: +0.6%/ Imports: -1.1%; Nonfuel: -0.2%; Exports: -0.8%; -1.1%

IN A NUTSHELL: “Atlas had nothing on the U.S. consumer, who continues to shoulder all the burden of growth in the country.”

WHAT IT MEANS: The markets are continuing on their merry wild mouse ride and investors continue to worry about oil and assorted international concerns. Meanwhile, back at the ranch, consumers are spending money as if nothing is wrong at all. On the surface, the January retail sales numbers don’t look particularly strong, but as usual, the details tell the real story. First, these data are not adjusted for price changes, so the declines in things such as gasoline enter as a negative. But gasoline prices fell more than sales, so its clear demand rose. The snow and cold weather led to strong demand for winter products and we ate in a lot as a result. Households started buying electronics again as well as general merchandise, so the rise in demand was fairly widespread. But maybe the best number was the so-called “control” group, which closely mirrors the consumption number in GDP and excludes gasoline, vehicles, building materials and food services, which rose strongly. We have started of the year with solid consumption of goods and with the weather turning cold, services demand could surge (utilities are part of the services number). And with consumer sentiment not getting crushed by the fall in stock prices, don’t be surprised if the solid household spending continues.

As for inflation, it still is being restrained by declines in import prices. Yes, energy costs are going down and where they go from here is anyone’s guess. The real issue is nonfuel costs. The January numbers were much less clear about the path of those goods. Imported food prices products jumped. While nonelectric capital goods costs were off, electrical equipment and non-vehicle transportation prices rose. Motor vehicles were up as were durable consumer goods. The details don’t say that all consumer imported goods prices are falling. As for exports, the farm sector continues to be hit by huge price declines.

MARKETS AND FED POLICY IMPLICATIONS: Janet Yellen testified in front of Congress this week and refused to bail out the stock markets. That, of course, set off a whole slew of market guru and big-investor invectives. They want the Fed to continue feeding the beast, as it did for years with quantitative easing. But the Fed wasn’t created to focus strictly on the markets: It’s U.S. economic growth that is job 1A. Today’s retail sales numbers don’t point to a recession coming any time soon. And the modest decline in the University of Michigan’s sentiment index also says that the average household has largely divorced itself from the markets. Why that surprises anyone is anyone’s guess. People have learned their lessons and appear to be looking long term. I cannot understand all the attacks on the Fed for raising rates only 25 basis points. Indeed, what kind of company would be crushed if the funds rate rose just one percentage point? Yes, there are growing risks, but their path is unclear. Anyone know where oil will be at the end of the year? If you do, tell me because I would like to by a beachfront home and retire. Basically, today’s retail sales numbers and the less than feared import price declines give the Fed some breathing room. Whether investors are buoyed by those reports, though, is anyone’s guess.

December Job Openings and January Small Business Optimism

KEY DATA: Openings: +261,000; Quits: +196,000/ Small Business Optimism: -1.3 points

IN A NUTSHELL: “If the labor market is tightening, can the economy really be faltering?”

WHAT IT MEANS: The stock market continues to gyrate wildly, but we can still take hope from the simple fact that we haven’t seen the real economy mirror the financial economy. The latest reports provide further indications that the labor market is still in good shape. The December Job Openings and Labor Turnover survey (JOLTS) shows just how Wall Street and Main Street are diverging. Unfilled positions surged in December to the second highest level on record. While hiring and separations were relatively balanced, the eye-opener was a jump in the number of people quitting their jobs. We are back to levels not seen since 2006, well before the recession began. That positions are hard to fill was reinforced by two other surveys. Yesterday, the Conference Board’s Employment Trends Index posted a nice gain, pointing further job growth going forward. Also, while the National Federation of Independent Business’s January survey showed that small business optimism is declining, the index measuring difficulty in filling positions rose to its highest level since the end of the recession. The NFIB members are concerned that business conditions and sales will not hold up going forward.  

MARKETS AND FED POLICY IMPLICATIONS: I have argued many times before, the key to the labor market is the willingness of people to leave positions, something they simply have not been doing since the onset of the Great Recession. That appears to have changed. Firms are going to have to start recognizing that they need to spend some money retaining their workers, especially since there are not that many people out there who need a new job. There are many who want a new position, and they can be lured away, but that means raising salaries. As firms raise salaries either to retain their workers or attract their workers, the pressure on margins and prices will only rise. Inflation is hardly an issue right now and with oil prices continuing to fall, the headline number will remain well below the Fed’s target for a while. But the members watch the JOLTS report closely as an indicator of future wage inflation, and given the quit rate level, it is flashing red. Nearly 2.9 million new positions were created last year and the unemployment rate dropped below 5% in January. Say what you want about discouraged workers, but when people are once again quitting, after having gone through the labor markets of the last seven years, that tells me those numbers accurately reflect what is going on. Fed Chair Yellen testifies in front of Congress on Wednesday and Thursday, so we will get some insights into her thinking about the economy. The latest labor market reports provide her with the ammunition needed to make a balanced presentation and keep her options open. Of course, investors are still following oil, so it is doubtful reports about the actual economy will make much of a difference.

January Employment Report and December Trade Deficit

KEY DATA: Payrolls: +151,000; Manufacturing: +29,000; Unemployment Rate: 4.9% (down 0.1 percentage point); Hourly Wages: +0.5%/ Trade Deficit: $1.1 billion wider

IN A NUTSHELL: “No, the sky is not falling and the labor market is not weakening as the details of the employment report were just fine.”

WHAT IT MEANS: Right after the January employment report was released, a certain business network’s website trumpeted: “Ugh, job growth is slowing now, too.” Please, give me a break. Is the headline number all that matters? No! It’s the details and they don’t tell me that labor market conditions have weakened at all. Let’s start with the disappointing employment gain. The largest decline, 38,500 workers, was in educational services, of all places. Really, is that anything other than a strange number? The second largest drop, 25,200, was in temporary help workers. If that is an indication that firms are trying to lock up their workers by moving temps to full time status, I have not problems with it. And finally, 14,400 messengers and couriers lost their jobs. Hey people, the delivery companies ramped up wildly to meet the growing holiday delivery demands, so a cut back was hardly surprising or likely repeatable. And are we really worried the government cut payrolls? Meanwhile, the job gains were spread across the economy and even in places where we didn’t think were strong. For example, there was a sharp rise in manufacturing, you know, the sector that is supposed to be in recession. Nearly 64% of the manufacturing industries posted job gains, so something good must be happening there. Hiring was strong in construction, health care, professional services, finance, retail trade and restaurants. Both high paying and low paying jobs are being created like crazy. There was a huge rise in the hourly wage. Major firms said they were raising wages on January 1st and some states increased the minimum wage. But wage gains are accelerating. Hours worked rose and weekly earnings increased sharply, hardly signs of a softening labor market. Let me make one other point. In March of last year, only 84,000 new jobs were added and the nattering nabobs of negativity, as I called them then, announced that the sky had fallen. Well, the total number of jobs added in 2015 was the largest since 1999. Enough said.

And then there was the unemployment rate, which fell to its lowest level since February 2008. The labor force participation rate continues to rise after bottoming last September. While the annual statistical changes make the 2015 and 2016 not strictly comparable, it appears that the labor force rose in January as well. These are all signs of a healthy labor market.

Another number was released today, the December trade deficit, though I doubt many people paid much attention to it. With the dollar rising, exports were expected to decline, and they did. Imports rose, another sign of a solid economy as well as cheaper foreign products.

MARKETS AND FED POLICY IMPLICATIONS: The Fed members are not business website headline writers. They take their time and digest the data and what they tasted was a pretty good meal. The job weakness came in places that were either odd or not surprising. The lower unemployment rate and rising wages further support the view that the labor market is doing nothing but tightening. Clearly, there are more uncertainties today than when they raised rates in December and hinted that there could be four increases this year. But the labor market is absolutely not one of them. Thus, investors will once again have to decide if a decent economy and higher interest rates is better than a weak economy and lower rates. I will take better growth and a Fed that is slowly raising rates anytime.

January NonManufacturing Activity, Private Sector Jobs and Help Wanted Online

KEY DATA: ISM (NonManufacturing): -2.3 points; Orders: -2.4 points; Hiring: -4.2 points/ ADP Jobs: +205,000/ Online Ads: +13,500

IN A NUTSHELL: “The new year hasn’t started off with a bang, but more like a whimper.”

WHAT IT MEANS: The first data for 2016 are trickling in and while the economy continues to expand, there are no signs it is accelerating. The Institute for Supply Management’s January reading on the nonmanufacturing portion of the economy was disappointing. Business activity decelerated sharply as orders grew at a slower pace than in December. As a consequence, hiring activity moderated as well. With order books filling slowly, it doesn’t look like we are in for any major acceleration in growth in this, the largest portion of the economy, anytime soon. The only unknown in this report is how much the blizzard hurt activity. As a consequence, we need to be careful in getting too down about the weakness. That said, on Monday, the January Supply Managers’ manufacturing index was released and while it was a little better than in December, it too pointed to sluggish growth.

This being the first week of the month, it means that Friday is Employment Friday. ADP released its estimate of January private sector job growth and it was better than expected. Payroll gains were solid and spread across companies of all sizes and in almost every industry. The only weak link appears to be manufacturing, which we also saw in the Supply Managers’ report. Still, after huge gains at the end of last year, expectations are that the January numbers would be a lot lower. This report suggest hiring should be less but decent nevertheless.

Speaking of the labor market, The Conference Board’s Help Wanted OnLine measure rose minimally in December. Labor demand picked up strongly in the Midwest and West, more moderately in the South, but declined in the Northeast. Again, it is not clear if weather played a role in the drop.

January motor vehicle sales were released this week and they were up despite the blizzard. The economy may be slowing, but people are once again in love with new vehicles.

MARKETS AND FED POLICY IMPLICATIONS: The latest economic news hasn’t been great and investors are getting whipsawed. We are seeing more questions about Chinese and even Japanese growth. So, where are we? As long as jobs are being created and incomes are rising, households will keep spending. And that is likely to be the case. Businesses may be turning cautious, but if they are linked into the domestic economy, they should continue to hire and invest, at least if they are not part of the energy complex. Basically, there are more uncertainties out there and that is likely to cause the Fed to be cautious in their drive to normalize. Both the January and February jobs report will be released before the next FOMC meeting, so let’s wait a while before we conclude a rate hike in March is off the table. However, the probability of it occurring at that meeting has slipped.

December New Home Sales and 4th Quarter Workforce Vitality

KEY DATA: Sales: +10.8%; Year-over-Year: +14.5%; Prices (Year-over-Year): -4.3%/ Workforce Vitality (Year-over-Year): +4%

IN A NUTSHELL: “It was a great year for housing and workers didn’t do that badly either.”

WHAT IT MEANS: Looking at the two feet of snow in my backyard makes it hard to remember the December record warm weather, but today’s new home sales number brings that back into my mind. Builders ended the year on a major high as new home sales surged in December. While the wonderful conditions helped, another factor may have been at work: Consumer desires for more reasonably priced units were being matched by supply. Indeed, there was a sharp drop in median prices. The share of homes sold in the middle market, $200,000 to $500,000 jumped from 64% to 68%. In the $500,000 and up segment, the share fell from 16% to 13%. Basically, homebuyers seem to be losing a little of their desire to own the big, expensive McMansions. In December, the large increase was driven increases in all regions, though the gain in the South was modest. For all of 2015, sales were up sharply despite a double-digit drop in the Northeast. Roughly 20% increases in the South and West led the way, while new home purchases rose modestly in the Midwest.

I often note that the hourly wage data are confusing. They have not been around long enough to determine a trend. Worse, they are averages that are affected by the type of hiring that occurs. For example, a firm may be raising wages for their continuing workers but if turnover brings in new workers at lower wages, the math tells us that wages may not be rising much. So, how do we really determine what is happening? ADP’s Workforce Vitality report fills in some of the gaps. The overall index rose strongly over the year, but what was eye opening were the wage numbers. Though overall wages rose 2.1% over the year, wages for full-time workers who stayed in their positions jumped 4.1%. Full-time workers who switched positions saw their wages increase 4.7%. In other words, the headline number hides the extent to which wage pressures have built. And with the unemployment rate likely to fall to 4.5% or even lower by the end of the year, those wage pressures will only build further.

MARKETS AND FED POLICY IMPLICATIONS: The Fed is meeting today and will issue a statement soon. Those who worry about the equity markets expect the FOMC to back off their rate increase plan. But the economic data are okay. Yes, fourth quarter growth looks like it was soft, but let’s look at the composition when it comes out on Friday. Housing is solid, the consumer is buying lots of vehicles and the job market is strong. The U.S. economy is still solid and outside the energy sphere of influence, it is very good. Excluding energy, inflation is slowly accelerating even with the strong dollar. And the pressure on wages will only add to the belief that inflation will move back up to normal rates, especially when the oil price declines end. But the markets are focused on oil and to the extent that falling energy prices lead to falling stock prices, the Fed will have to decide how much the financial economy trumps the real economy. That will be true not just in today’s statement, but in comments the members will make going forward. I believe they should stay the course, but that is not a consensus view.

December ADP Jobs, ISM NonManufacturing Activity, Help Wanted Online and November Trade Deficit

KEY DATA: ADP Jobs: +257,000/ ISM (NonManufacturing): -0.6 point/ HWOL: -276,800/ Trade Deficit: down $2.2 billion

IN A NUTSHELL: “The markets may be worrying about China but investors have little cause to be concerned about the U.S. economy.”

WHAT IT MEANS: Tons of data were released today and they generally told a similar story: The U.S economy is just fine. Since on Friday we get the “all-important” jobs report, we should probably start with some estimates of what that number may look like. If ADP is anywhere close to the government’s number, the December jobs report be really good. The payroll services firm’s estimates of private sector growth have trended over time with the BLS data, but have been off quite a bit on a monthly basis. Regardless, the payroll gains were spread reasonably evenly across all sizes of companies. It was good to see large firms hiring again. This component had been pretty moribund during most of 2015. There was a surge in construction, but that may have been the result of the unseasonably warm weather.

Most people concentrate on manufacturing, but the real action is in the services sector, which is the biggest portion of the economy. Watching what happens there is critical to understanding the direction of the economy. The Institute for Supply Management’s December Non-Manufacturing Index declined to its lowest level in twenty months, but the details tell a different story. The measure of activity and production rose, as new orders, especially exports, grew faster and firms increased hiring. Firms got their products out the door faster and that drove down the index. In other words, the largest portion of the economy is doing just fine.

As for hiring, The Conference Board’s measure of help wanted online ads fell sharply in December. The data are volatile and smoothing them out, the trend is still up. Still, firms seem to have become a little more cautious as the number of new ads has pretty much stabilized.

On the trade front, the deficit shrank in November as both exports and imports fell. Interestingly, oil imports soared. Imports of cell phones fell by nearly 20%, but they have been bouncing around like crazy. On the export side, we sold less of most products except aircraft. Still, it looks like the trade deficit could narrow in the fourth quarter, boosting growth.

MARKETS AND FED POLICY IMPLICATIONS: Today’s data may not have been uniformly strong, but they do point to a very solid economy. That seems to matter little to investors as worries about China and Korea and oil prices are overwhelming indications that the domestic economy is growing at a pace that will allow the unemployment rate to keep falling, and labor shortages to continue expanding. A year from now, the unemployment rate should be at or more likely below 4.5% and many parts of the country will be dealing with rates below 3%. A year ago I expected that 2015 would be the year of “take this job and shove it”. I was a year early. Turnover rates in some industries are rising already and should be increasing across most industries and occupations by the summer. Firms will have to make decisions about how to deal with increasing demand and a shrinking employment pool. That is the issue on which most U.S. firms should focus, not a slowing China or low energy prices.

November Retail Sales and Wholesale Prices

KEY DATA: Retail Sales: +0.2%; Excluding Vehicles: +0.4%; Control: +0.6%/ PPI: +0.3%; Goods: -0.1%; Goods Less Food and Energy: -0.1%; Services: +0.5%

IN A NUTSHELL: “The consumer appears to be in a shopping mood and that is good news for the economy and the Fed.”

WHAT IT MEANS: We may not be shopping ‘till we drop, but we are out there spending money. Retail sales were up modestly in November if all you do is look at the headline number. But as usual, the top line is very misleading. First, declining gasoline prices led to weaker dollar sales numbers, not necessarily weaker unit sales – the average price fell by 5.3% but total sales were off only 0.8%. Once again, vehicle sales were off a little, but it is hard to make the case that people stopped going to dealerships. The November sales pace was exceeded only a handful of times over the past forty years. Meanwhile, households bought electronics and appliances, clothing, sporting goods and most merchandise in general. We shopped online and when we were out, we ate out. And if we stayed in, we ate a lot also. In other words, we spent money. Adjusting the retail sales data so they better match up with GDP personal consumption numbers, the so-called Control Group, demand increased sharply.

On the wholesale inflation front, the divide between goods and services continued in November. Goods producer prices eased a touch, but the drop was the smallest in five months. When you exclude food and energy, the decline was minimal as rising food prices offset falling energy costs. Finished consumer goods prices less energy were up not just in November, but over the year as well. That is a potential sign the downward pressure on consumer goods prices may be fading. But the real pressures remain in the services component, which is roughly two-thirds of consumption. Service producer price increases appear to be accelerating.

MARKETS AND FED POLICY IMPLICATIONS: These reports, as well as an early indication by the University of Michigan that consumer confidence may be improving, buttress the Fed’s stance that it is time to raise rates and the economy can handle it. The one major restraint to growth is lower energy prices, which is causing major adjustments in that sector. In the short-term, those cut backs are overwhelming the slow adjustment to the lower energy expenses by consumers. Households don’t seem to be spending a whole lot of the added cash flow. But really, are there many people who are not linked to the energy sector that really believe that in the long run, the economy is better off with $100/barrel for oil than $40? I suspect that most Fed members realize that the adjustments in the energy-patch may be harsh, but they will fade. Meanwhile, the added money in consumers’ pockets will eventually find its way into the economy in a very broad based manner. There is nothing in the way of a Fed rate hike on Wednesday. I suspect the statement will focus on the FOMC’s expectations that future hikes will be slow, but we already know that. Slow, by the way, seems to be every other meeting. So, the real question is, when will the economy become strong enough and inflation high enough that Fed goes every meeting? If low rates are causing economic dislocations, a slow rise doesn’t help very much. Just ask Alan Greenspan.

November Employment Report

KEY DATA: Payrolls: +211,000; Revisions: +35,000; Unemployment Rate: 5.0% (Unchanged); Hourly Wages: +0.2%

IN A NUTSHELL: “There ain’t no stopping (them) now.”

WHAT IT MEANS: My apologies to Luther Vandross, but there really is nothing except a major crisis that will stop the Fed from its appointed first round of rate hikes. All it would have taken is a mediocre employment report to provide the necessary cover to raise rates and the November data were more than that. Job gains were solid and there were also upward revisions to both September and October. The three month average now stands at 218,000, which is quite good given that the biggest complaint businesses have is the lack of supply of qualified workers. And the increase came despite further cut backs in energy-related firms, weakness in clothing stores, a weird crash in the motion picture industry and a very strange reduction in the vehicle sector, which continues to set new sales records. And, we actually saw a decline in temporary help services companies! In other words, this report was probably even stronger than the headline number implies. Hourly wages rose but there was a small reduction in hours worked, which also seemed a bit strange.

On the unemployment side of the report, almost every component was solid. While the rate remained at 5%, there were strong increases in the labor force and the number of people employed. This led to a rise in the participation rate. While I don’t think much of it, the infamous U-6 rate, which includes all reasons for not having a job, did raise a tick. However, it is still down 1.5 percentage points over the year. The stronger labor market is curing lots of ills.

In a different report, the trade deficit widened in October, but the three-month average is still declining. In any event, today is all about the employment numbers.

MARKETS AND FED POLICY IMPLICATIONS: This report all but green lights the Fed. And it should. There really is nothing more to say other than reprint the Luther Vandross lyrics from the song, “Ain’t No Stoppin’ Us Now”,

Now, are y’all ready?
Are y’all ready?
Here we go now
Do it with the fever
Yeah, come on

Ain’t no stoppin’ us now
We’re on the move
(Hey-yeah, hey-yeah)
Ain’t no stoppin’ us now
We’ve got the groove

There’ve been so many things that have held us down
But now it looks like things are finally comin’ around, yeah
I know we’ve got a long, long way to go, yeah
And were we’ll end up, I don’t know
But we won’t let nothin’ hold us back
(Writer(s): Gene Mcfadden, John Whitehead, Jerry Allen Cohen, Copyright: Mijac Music, Warner-tamerlane Publishing Corp.)

November Manufacturing Activity and October Construction

KEY DATA: ISM (Manufacturing): -1.5 points; Orders: -4 points; Hiring: +3.7 points/ Construction: +1%

IN A NUTSHELL: “The lull in manufacturing continues even as other segments of the economy heat up.”

WHAT IT MEANS: This is the fall of manufacturing’s discontent. The Institute for Supply Management reported that in November, the industrial sector declined for the first time in three years. New orders and production turned negative after having also grown about three years. I guess all good things must end, though it is not nice to see this trend turn downward. Both export and import orders continued to slow, though the import cut backs are moderating. On the other hand, the employment index, which did dip into the red earlier in the year and again in October, rebounded. Manufacturing has been restraining the job numbers so maybe we will see an uptick in Friday’s employment report.

While manufacturing may be having issues, the construction sector is doing just fine. Construction spending jumped in October and the rise was spread almost evenly between public and private, residential and nonresidential. For the first ten months of the year, private construction is up 11.2% compared to the same period in 2014. The October level of total private construction was nearly 16% higher than last year’s pace. Once again, the increases were spread evenly between residential and nonresidential activity. That is interesting since some of the housing reports have been less than stellar. For example, yesterday’s National Association of Realtors’ Pending Home Sales numbers were up less than expected. The problem facing the housing market seems to be supply, but despite the solid construction numbers, there are still not a lot of homes, new or existing, that are on the market. It looks like 2015 will be a great year for builders and the good times seem to be getting better.

MARKETS AND FED POLICY IMPLICATIONS: While everyone likes to focus their attention on manufacturing, it is the services component that generates most of the jobs. Manufacturers employed less than 9% of all employees and just a little over 10% of private sector workers. The manufacturing job slowdown probably reduced the total average monthly job gains by less than 10,000 per month. That is a concern, but not so great that it changes the perception that the job market is strong. The real problem, as we all know, is in the mining/oil production sector. Despite the free fall in oil patch activity, total construction in the rest of the economy is doing quite well. That is what should be the take away and what the Fed members will likely consider as they barrel toward the first rate hike in two weeks (most likely). With the November jobs report being released on Friday, investors will probably assume today’s numbers changed no minds at the Fed and react accordingly.

October Income and Spending, Durable Goods Orders, New Home Sales and Jobless Claims

KEY DATA: Consumption: 0%; Income: +0.4%/ Durables: +3%; Excluding Aircraft: 0%; Capital Spending: +1.3%; New Homes: +10.7%/ Jobless Claims: -12,000

IN A NUTSHELL: “The economy is hardly a turkey so the Fed, which is fed up with low rates, will likely tighten the economy’s belt a little next month.”

WHAT IT MEANS: The day before Thanksgiving is when everyone dumps their data so they can get out early and today was no exception. Most of the reports were decent. Let’s start with the consumer. Households’ balance sheets are better as income is rising solidly. Most encouraging was a sharp increase in wages and salaries. The tight labor market, which got even tighter in October as claims were about as low as they get, is finally causing firms to raise compensation more rapidly. However, people aren’t out shopping until they drop or even until they are tired. They are spending money, but not at a great pace. The weakest segment of was durable goods demand, which is really nothing to worry about. October vehicle sales were one of the highest on record so we know consumers are more than willing to buy big-ticket items. Indeed, the added burden of monthly vehicle loan payments may be a reason that retail sales have not taken off despite the rise in incomes. But households are not stretched as the savings rate continues to edge up. We are approaching the 1990s savings rate. On the inflation side, prices rose modestly and when food and energy were excluded, they were flat.

Manufacturing has been a soft spot in the economy, but that may be changing at least a little. Durable goods orders rose sharply, but most of that was for civilian and defense aircraft. Still, orders for computers, communications equipment and machinery were up. Again, there was one very positive component of the report: Business capital goods orders rose strongly and it looks like the cut backs in investment may have ended.

New home sales surged in October – not really. There was a sharp rise in signed contracts but that was only because the September number was revised down. The October level was okay but not particularly great. This report, though, was weird. Demand in the Northeast jumped by 135% but fell slightly in the West. But the strangest number was medium prices: They fell, yes fell, by 6% from the October 2014 level. That makes no sense at all.

MARKETS AND FED POLICY IMPLICATIONS: Today’s data did nothing but provide the Fed with more cover to raise rates in December. The only potential speed left is the November jobs report, which will be released on Friday, December 4th.   But that number would have to be almost catastrophic – i.e., negative – for the Fed to get worried. The markets are expecting a rate hike so a move shouldn’t cause that great a reaction. With growth exceeding potential, with wages rising more solidly and with businesses starting to invest again, there is lot for the economy to be thankful for. So, on that note let me say:

Have a wonderful Thanksgiving!