Succinct Summation of the Busy Week's Events:

Succinct Summation of the Busy Week’s Events:

Positives,

1)The BLS said private sector growth was 317k in January, with a headline print of 353k. And, the two prior months were revised up by a combined 126k. Average hourly earnings jumped by .6% m/o/m, twice the forecast, but helped by the drop in hours worked.

2)The number of job openings in December, thus somewhat dated, was 9.026mm, about 275k above the estimate but about in line with the 6 month average of 9.095mm but that is down from the 1^st half of 2023 average of 9.9mm and the 2022 average of 11.18mm. The hiring rate ticked up by one tenth to 3.6% after falling by 2 tenths in November which was the lowest since 2014 not including Covid. The quit rate held at 2.2% but that’s the slowest since 2018 not including Covid.

3)Following the contraction seen in every single regional manufacturing survey, the national January ISM remained below 50 too but a bit less so as it ticked up to 49.1 from 47.1 and that was above the estimate of 47.2. It’s the 15^th straight month under 50. In terms of breadth, 4 industries saw growth vs just 1 in December while 13 saw a contraction vs 16 last month. The ISM said “Demand remains soft but shows signs of improvement, and production execution is stable compared to December, as panelists’ companies continue to manage outputs, material inputs and labor costs…62% of manufacturing GDP contracted in January, down from 84% in December.”

4)The January Conference Board’s consumer confidence index followed the UoM survey in the direction of trend upward. The print of 114.8 was as forecasted, up from 108 in December with most of the gain coming from the Present Situation. That’s the best level since December 2021 but still well below the February 2020 print of 132.6. Also of note, one yr inflation expectations slowed to 5.2% from 5.5%. The bottom line was this from the Conference Board, “January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions as companies continue to hoard labor.”

5)Productivity in Q1 exceeded expectations with a 3.2% q/o/q annualized rate vs the estimate of 2.5%. Offsetting this somewhat was a 3 tenths downward revision to Q4. Looking y/o/y and productivity grew by 2.7% and is the 3^rd quarter in a row of gains and which followed 5 quarters in a row of declines. Unit labor costs were up by 2.3% y/o/y vs 1.7% in Q3 and 3.6% in Q2 and coincides with the math of a rise in productivity.

6)There was slight relief in world container shipping prices for the week ended 2/1 as the Shanghai to Rotterdam trip now costs $4,661 per container vs $4,984 in the week before, though still up from $1,667 at the end of 2023.