Nonfarm Payrolls October 2017

The Bureau of Labor Statistics issued its second “noisy” report in as many months this morning; the noise is largely attributable to the 2017 storm season. Headline figures indicate that the US economy added 261,000 jobs in October commensurate with the unemployment rate dipping 0.1% to 4.1%. Significant revisions were made to the September and August employment readings, adding an incremental 90,000 jobs to what was previously reported. Hourly wages did cool a touch (and by a touch, I mean a penny) month over month after posting a significant increase in September; employees earned $26.53/ hour in the month of October. US workers’ hourly workweek was unchanged month over month and year over year at 34.4 hours.

Adding it all up, we see a slightly less robust employment environment today than we did a year ago. It is unclear how taxes and the uncertainties around fiscal stimulus will affect employers in the coming months. The ramifications for the US dollar and treasuries will likely be significant. It is also likely that central bank policy will come into even greater focus as we move closer to yearend. The Federal Reserve will be under new leadership in the coming months and the pace of global economic growth and its interpretation will be the key to policy convergence or divergence among the world’s central banks. This, of course, will have an impact on equities and risk appetite in general.

Total Wealth Partners remains neutral USD, neutral rates, and bullish equities.

Market Outlook: Neutral USD, Neutral Rates, Bullish Equities