Weekly Economic Update for September 10, 2012

September 25, 2012  |   News

In August, employers added 96,000 jobs – far short of the 144,000 consensus estimate of economists polled by Briefing.com. About 40% of the new hires were in four low-paying sectors (retail, leisure & hospitality, temporary help and home health care services). The jobless rate did fall to 8.1% last month – but that was because more Americans stopped looking for work. So will the Fed announce a stimulus later this week, or signal that interest rates will stay at record lows for another year or two? Some analysts think we will see both those moves made.1,2,3

Stocks climbed worldwide last week after European Central Bank President Mario Draghi unveiled the Outright Monetary Transactions program. The ECB would use the OMT to buy short-term government bonds of nations adopting austerity cuts to try and reduce borrowing costs for these countries. The proposal passed 22-1 in the ECB’s governing council – only Germany voted against it. Wednesday, Germany’s high court issues an opinion about the legality of the new EU bailout fund.4

The Institute for Supply Management’s manufacturing sector PMI was at 49.6 for August, down from 49.8 in July and indicating further (slight) contraction. ISM’s service sector PMI improved to 53.7 in August from a 52.6 July mark. Overall U.S. auto sales in August were up 20% from a year before, with big increases for Honda (60%), Toyota (46%), Chrysler (14%), Ford (13%) and GM (10%).2,5

Friday, the S&P 500 closed at 1,437.92 (a 4-year high), climbing 2.23% for the week. The NASDAQ (+2.26% to 3,136.42) and Dow (+1.65% to 13,306.64) also rose substantially. Oil futures ended the week at $96.42; a gallon of gas averaged $3.82 Friday. Gold settled at $1,740.50 – its highest COMEX close since February 28.3,6

THIS WEEK: On Monday, Del Monte, OSH and Casey’s General Stores issue earnings reports. Tuesday brings earnings from Texas Instruments. Wednesday, the German Constitutional Court rules whether that nation can continue to legally participate in the EU’s sovereign debt relief effort; stateside, Apple is expected to announce a new iPhone. Thursday, the Fed will get the world’s attention with its latest policy statement, the August PPI will be released along with weekly jobless claims figures, and Neiman Marcus presents earnings. Friday, the August CPI arrives plus the preliminary University of Michigan consumer sentiment survey for September and data on August’s retail sales and industrial output.
Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/7/123,7,8,9
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1 – www.latimes.com/business/money/la-fi-mo-economy-jobs-20120907,0,5557953.story [9/7/12]
2 – briefing.com/investor/calendars/economic/2012/09/03-07 [9/7/12]
3 – money.msn.com/market-news/post.aspx?post=e54a1459-89f0-4feb-8187-e80ef223ce3c [9/7/12]
4 – www.cnbc.com/id/48936899 [9/7/12]
5 – online.wsj.com/article/SB10000872396390444301704577631160247456798.html [9/4/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F7%2F11&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F7%2F11&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F7%2F11&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F7%2F07&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F7%2F07&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F7%2F07&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F6%2F02&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F6%2F02&x=0&y=0 [9/7/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F6%2F02&x=0&y=0 [9/7/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/7/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/7/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]



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