Sunday, September 09, 2012

Quick review/preview

Last week included lots of important data hit our screens thought it might make sense to review some of it and preview the upcoming week.

* Jobs report - Overall, this was a weak report.  Private jobs came in below expectations, prior months were revised down, average hourly earnings dipped,

As I mentioned last week, people have suddenly discovered that the falling participation rate is the primary driver in moving the unemployment rate lower. 

This chart from calculated risk shows a longer trend line for the participation rate and as expected if you go back into the 50's/60's you see that the participation rate was far lower than it is today as the baby boomers had not yet entered the workforce.

Auto sales continue to trend above expectations.  I suspect that loosening credit standards and the fact that we are three years past cash for clunkers (3yrs seems to be the sweet spot for many frequent buyer/traders of cars) contributed to this spike.

Finally, August rail traffic was a mixed and doesn't give us any real guidance on the health of the economy.

For the upcoming week we have a couple of things to watch:

* 9/11 anniversary - No museum, but 1 WTC is finally making some progress. 

* 9/12-9/13 - This could be the day that the Fed finally announces the long anticipated asset purchases.  Look for key phrases like open ended and mortgage backed securities.  How will the market react?  Sell the news or buy on confirmation that QE3 is FINALLY here?


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