Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)The bullying worked, no new tariffs on Canada and Mexico.

2)Job growth in January totaled 143k, 32k below expectations but the two prior months were revised up by a combined 100k. The household survey included the changes to population growth and the BLS said the "number of unemployed changed little over the month." The U6 rate was 4% vs 4.1% in December as more jobs were added relative to the rise in the labor force. The all in U3 rate though held at 7.5%. The benchmark revisions showed an average job gain of 166k in 2024 vs the last figure of 186k per month. This compares with 216k in 2023 and actually just about matches the pre Covid 2019 average monthly job gain of 165k. The participation rate ticked up by one tenth to 62.6%. For the key 25-54 age cohort, the participation rate was 83.5%, also up one tenth m/o/m. Average hourly earnings grew by .5% m/o/m, two tenths above the forecast and the y/o/y gain was 4.1%. After a steady rise over the past few months, average duration of unemployment fell to 22 weeks from 23.7 weeks.

3)The January ISM manufacturing index was 50.9, just above the estimate of 50 and follows 26 straight months of below 50 prints. Breadth was mixed as 8 of 18 industries saw growth vs 7 seen in December. Eight too experienced a contraction, also vs 7 in the month before. The balance saw no change in their business.

4)Productivity in Q4 was as expected up 1.2% q/o/q annualized. Versus Q4 of 2023 it was higher by 1.6%. To put into context that 1.6% gain, after a 2.1% rise in Q3, the 30 yr average increase in productivity is exactly 2%. Unit labor costs were up by 2.7% y/o/y which matches the quickest since Q2 2023 but was a hair below expectations.

5)With a 5 bps drop to below 7% in the average 30 yr mortgage rate to 6.97%, refi's rebounded by 12.2% after two weeks of declines.

6)From Google/Alphabet: "Strong growth in Search and YouTube advertising was partially offset by y/o/y decline in network revenues. In terms of vertical performance, the 13% increase in search and other revenues was led by financial services followed by retail. The 14% growth in YouTube advertising revenues was driven by strong spend on US election advertising with combined spend from both parties almost doubling from what we saw in the 2020 elections."

7)From Madison Square Garden Entertainment: "we're not seeing any slowdown in consumer demand. In our booking business, the majority of concerts were once again sold out during the quarter. This led to over 90% sell through for concerts at our venues in the quarter. For shows that have or will take place in the fiscal 3rd quarter, our sell through is roughly in line with what we saw last year...combined food and beverage and merchandise per caps at concerts were up as compared to the fiscal '24 2nd quarter, as well as the fiscal '24 full year average. And then of course we saw very strong consumer demand for the is year's Christmas Spectacular, with record revenues, the strongest sell-through rate in 25 years, and record high ticket, food, beverage and merchandise per caps."