Mixed News Again From the Global Economy

U.S. Review

Looking for Further Improvement in the Labor Market

• Minutes from the September FOMC meeting showed the committee was close to raising rates, but was awaiting some additional gains in the labor market. The job opening rate fell in August to an eight-month low, but the less volatile turnover measures showed little change. Hirings and involuntary separations fell slightly, while quits were up a bit.
• Retail sales for September rose 0.6 percent, in line with expectations, but core sales, measured by the control group, disappointed by rising only 0.1 percent.
• Measures of import prices and producer prices released this week point to a modest pickup in inflation.

Global Review

Mixed News Again From the Global Economy

• Markets reacted negatively to the news that Chinese exports dropped 5.6 percent in September on a year-earlier basis in local currency terms (they dropped 10 percent in U.S. dollar terms) as markets were expecting exports to have grown 2.5 percent. The expectation is that, as the third quarter earnings release season starts, this weakness from Chinese exports is going to tarnish companies’ earnings at a time when the U.S. dollar has appreciated.
• Perhaps the biggest concern for markets today is that the more coincident data are pointing to weakness after some relatively stronger months during the last part of the second quarter and the first month of the third quarter.

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