Total U. S. Construction Spending rose by 0.1% in August – below my forecast an increase of 0.4% – following a downwardly revised 0.2% (from 0.1%) in July.


Total private construction spending declined 0.5% due to a 0.7% decline in residential construction and a 0.2% decline in non-residential construction.  On a year-over-year basis, total construction spending is up 5.3% with private construction spending up 4.4% and public construction spending up 14.0%.

The takeaway from the report is that public construction spending has continued driving the overall growth rate while private construction spending growth has moderated – likely due to cost constraints.

Non-Farm Payroll growth in September was much weaker than expected.  That will be attributed by some sources to the effects of Hurricane Florence, but the overriding point is that upward revisions to August non-farm and private sector payrolls more than compensated for the headline misses for September.


September non-farm payrolls rose by 134,000 (I had forecast 184,000). Over the past three months, job gains have averaged a pretty impressive 190,000 per month. Revisions were substantial with August payrolls revised up to 270,000 from 201,000 and July payrolls revised up to 165,000 from 147,000.

The U.S. Unemployment Rate dropped to 3.7% from 3.9 – I had forecast a drop to 3.8%.


Persons unemployed for 27 weeks or more accounted for 22.9% of the unemployed versus 21.5% in August and the U-6 unemployment rate – which accounts for unemployed and underemployed workers – was 7.5%, versus 7.4% in August.

The takeaway from the employment/unemployment reports is that the labor market is solid and still simmering with the prospect of pent-up wage pressures being unleashed at any point as employers encounter difficulty in finding qualified workers.

Consumer Credit rose by $20.1 billion in August – well above my forecast for an increase of $14.8 billion.

Non-revolving credit increased by $15.2 billion to $2.894 trillion while revolving credit rose by $4.8 billion to $1.042 trillion.

Consumer credit increased at a seasonally adjusted annual rate of 6.25% in August, with revolving credit increasing at an annual rate of 5.5% and non-revolving credit increasing at an annual rate of 6.5%.

The takeaway from the report is that it reflects a pickup in credit demand that should be construed as an offshoot of a strengthening economy led by a solid labor market.

What to Watch for This Week

Inflation in September, as measured by the Consumer Price Index, is likely to have risen by 0.2%.

Consumer Sentiment has been on a tear with the September number at its highest level since 2004. Look for the preliminary October level to drop slightly to 100.0 from 100.8.