Economic Update...

Last week was a doozy in terms of data. While my brief summary below highlights a mix of softening and strengthening U.S. statistics, on balance, the U.S. economy is improving. I also keep notes on releases for the rest of the world (which I'd be happy to forward you upon request) and, on balance, the rest-of-the-world economy is struggling to find its way.

I'll keep you posted and offer my view on what it all means for the markets in the days and weeks to come.

Monday:

PERSONAL INCOME AND SPENDING both rose in August: Real disposable personal increased 0.3 percent, compared with an increase of 0.1 percent in July.  Real personal consumption expenditures increased 0.5 percent, in contrast to a decrease of 0.1 percent...

PENDING HOME SALES declined 1% vs having been up over 3% in July. Take out the decline in investor activity and the numbers aren't bad...

THE DALLAS FED MANUFACTURING BUSINESS INDEX rose to 10.8 from 7.1 the prior month...

Tuesday:

ICSC retail sales, declined WoW and report a modest YoY number. The last few weeks have been uninspiring...

THE JOHNSON REDBOOK reported better WoW results than the ICSC report. The 4.3% YoY increase denotes an expanding economy...

HOME PRICES declined once again according to the CASE SHILLER INDEX... 6+% YoY growth reflects a steady recent decline in prices...

CHICAGO PMI (Purchasing Managers Index) came in lower than last month, but, basically, remains a positive macro indicator at this point...

THE CONFERENCE BOARD CONSUMER CONFIDENCE surprised to the downside, falling to 86.0 from August's revised recovery high of 93.4...

THE STATE STREET INVESTOR CONFIDENCE INDEX came in ahead of expectations based on a spike in optimism among, of all people, European investors. North American and Asian investor component contracted, in contrast...

Wednesday:

MARKIT MANUFACTURING PMI came in pretty strong... Of particular note is rise in both input and output prices as well as the very strong employment report...

ISM MANUFACTURING PMI came in off of the headline number, as did Markit's, however, while the number remains an expansionary signal, the underlying components doesn't inspire the optimism that the Markit report did. While Markit's employment report was strong, ISM's was weaker vs the prior month. Prices paid, however, were up, but not as markedly as Markit's survey reported...

AUTO SALES missed the estimates in September, falling 6.3%. After a very strong August...

MORTGAGE ACTIVITY was unchanged week over week for new purchases, off .3% for refinances...

THE ADP JOBS REPORT came in just fine at 215,000...

All told, while today's CONSTRUCTION SPENDING number was a real disappointment, it doesn't merit a panic at this point...

GALLOP'S US JOB CREATION INDEX offers some optimism on the jobs front . From Econoday's summary:

Gallup's Job Creation Index reached a six-year high of plus 30 in September, up from readings of plus 28 both in July and August. For the third month in a row and only the third time since 2008 workers were slightly more likely to report that their employer is hiring than they were to report that there were no changes in their workforce.

Thursday:

The CHALLENGER JOB-CUT REPORT--- of layoff announcement totaled 30,477 in September which is the lowest since all the way back in June 2000---supports what I'm seeing in the surveys (job growth)...

The low WEEKLY JOBLESS CLAIMS NUMBER lends further support to recent employment indicators. From Econoday's summary:

There are fewer and fewer workers drawing unemployment benefits which points solidly at improvement underway in the labor market. Initial claims fell 8,000 in the September 27 week to 287,000, pulling down the 4-week average by a sizable 4,250 to 294,750 which is nearly 10,000 below the month-ago comparison...

THE BLOOMBERG CONSUMER COMFORT INDEX declined to a four month low: From Bloomberg's summary:

The Bloomberg Consumer Comfort Index declined to 34.8 in the period ended Sept. 28, the lowest reading since May 25, from 35.5. Views of the economy were also the weakest in four months, and the personal finances gauge dropped to its lowest reading since early August...

Friday:

Very good BLS JOBS number (248k) today. Plus revisions for last August and July put the numbers up to 180k and 245k respectively. Strong confirmation of what I'm seeing in various surveys, etc...

US MARKIT SERVICES PMI came in at a strong 58.9 (above 50 denotes expansion). Backlog orders are at record highs as new business grew at a "sharp and accelerated pace", according to the report...

ISM NON-MANUF PMI came in relatively strong, at 58.6, as well. The employment component being very strong... The reported strength in construction and retail are harbingers of optimism going forward...