This Week data starts on Monday with the ISM manufacturing index; service sector hits on Wednesday. Recent economic measurements have continued to be a mixed picture; consumers feeling better but still won’t spend, home prices increasing slightly, weekly jobless claims declined more than thought, real personal spending in August up just 0.1%. Various data points paint a mixed outlook. Europe of course is still having a major impact on global markets as the leaders try to hold the euro together as debts in Spain and Italy are difficult to resolve. One after another plan on trying to achieve a balance between severe austerity and assistance from the ECB are elusive.
This week is employment week; Friday the BLS will report Sept employment data, the early estimate is non-farm jobs increased to 120K frm 96K in August. Private non-farm jobs are expected +130K with unemployment unchanged at 8.1%. Unemployment would be much higher if it were not for more people simply dropping out looking for a job. Long term interest rates, including mortgage rates are slowly declining; mortgage-backed securities leading the way after the Fed announced it would buy $40B a month of MBSs with no limit announced. The Fed wants employment to improve and says buying MBSs will help….and I have a bridge in Brooklyn I want to sell. Look for volatility this week as every word out of Europe is seen as the last one.