Data paints blurry picture

The economic data roller-coaster continued on last week, giving a little something to everyone, including likely confusion. 

Weekly jobless claims fell again, from 228,000 to 216,000, and the ADP monthly survey of private employment showed a large gain in jobs, rising from 159,000 to 233,000, well above expectations. Contrast that to the very weak 12,000 new jobs in the October non-farm payroll report, which also included a downward revision of 112,000 jobs from August and September. The unemployment rate held at 4.1%, however, and average hourly earnings and hours worked both rose slightly more than expected in the month.

Third quarter GDP rose 2.8%, after rising 3.0% in the second quarter, driven by very strong consumer spending. The price index in the report pointed to lower inflation, up 2.2% versus 2.8% in the prior quarter. Another inflation figure, the Federal Reserve’s preferred measure, rose 2.3% annual rate in the third quarter, up from 2.2% in the second. Add to that a large jump in consumer confidence in the Conference Board survey. Not to be outdone, two separate surveys of manufacturing activity showed conflicting results, with one up and one down. 

Data clouded by hurricane impacts certainly make the Fed’s job more difficult. Markets for the last few weeks have been mulling over the impact of the upcoming election and how the Fed may react. All this produces a cloudy picture of what comes next.