Posted by: cfigueira | December 1, 2010

Key Economic News

A ton of data today, covering the labor market, conditions in manufacturing and construction, auto sales, and productivity. We also hear from Vice Chairman Yellen, two other members of the FOMC (Gov. Tarullo testifying on mortgage servicing at 10:00; Dallas Fed President Fisher speaking on the economy at 13:00), and the beige book.

The mortgage Bankers Association’s index of mortgage applications tumbled 16.5%, though all of this wa due to a sharp drop in applications for refinancing. The purchase loan index eked out a 1.1% gain on top of the 14.4% surge reported last week…

Private Hiring Firms Up; Productivity also Up on Revision
ADP report stronger than expected in November with significant upward revisions to October. Results suggest either a bit of upside risk to our +125k payroll estimate or, alternatively, an offset in state and local layoffs. Productivity firmer on revision in Q3, as widely expected after the GDP revision, with unit labor costs a bit less weak on trend.

Key Numbers:
ADP employment report predicts private payrolls +93k in Nov vs.. median forecast (of ADP) +70k.
Nonfarm productivity +2.3% in Q3 (mom, +2.5% yoy) vs.. median forecast +2.3%.
Unit labor costs -0.1% in  Q3 (mom, -1.1% yoy) vs.. median forecast -0.2%.

9:10 Federal Reserve Vice Chairman Janet Yellen speaks on “Fiscal Responsibility and Global Rebalancing”…to the committee for Economic Development in New York. This could pick up on some of the themes discussed by Chairman Bernanke in his recent speech at the European Central Bank.

10:00: ISM manufacturing index for Nov…steady and sturdy? With most regional surveys showing robust growth in manufacturing, we think the ISM manufacturing index will hold onto last month’s gain.
Median forecast (of 82): 56.5, ranging from 54 to 58.1, last 56.9.

10:00: Construction outlays for Oct…flat or down? We  expect an increase in construction outlays but do not hold this view with strong conviction.
Median forecast (of 53): -0.3%, ranging from -1.0% to +1.2%; last +0.5%.

14:00: Federal Reserve beige book…Most of the news since the last report has been at or above expectations, so this one should have a more upbeat tone. The Cleveland Fed is due for the summary.

Late morning/early afternoon: Lightweight vehicle sales for Nov…slowly grinding higher? Anecdotel reports from the manufacturers suggest little change from the October levels.
For total sales: median forecast (of 43): 12.1mm, ranging from 11.7mm to 12.5mm; last 12.25mm.
For domestic: median forecast (of 20): 9.0mm, ranging from 8.8mm to 9.2mm; last 9.27mm.

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