Unexpected Drop in Unemployment Rate
- The labor market appears to be on stronger footing as payrolls rose by 114,000 jobs in September and revisions to previous months' data added a cumulative total of 86,000 jobs in July and August. The unemployment rate dropped to 7.8 percent, the lowest level since January 2009.
- Although, factory orders fell 5.2 percent in August, the outlook for the manufacturing sector is a bit more encouraging based on new orders in September.
- The ISM manufacturing index rebounded in September and now sits above the demarcation line for expansion at 51.5. The new orders component increased to 52.3.
Foreign Growth in Q3 Remained Lackluster
- With the third quarter now in the history books, it appears that economic growth in most major foreign economies remained rather sluggish in the most recent three-month period. Real GDP in the Eurozone likely contracted again, and growth in China appears to have been rather weak, at least by Chinese standards.
- Brazil may be the exception to the rule, as its economy appears to have strengthened. That said, we generally do not expect significant acceleration in most foreign economies anytime soon.