Each week in the “Monday Morning Kickoff” we review some of the economic news from the past week and look at the news just ahead. Recently we have mainly downplayed most economic releases–except for a few.
Well as all of us know—most of these releases are not important–UNTIL they are–and now some previously ignored data is being taken as important.
Today we had the ADP employment report for August being released at a much stronger than expected 230,000 new jobs–against a consensus of 179,000. Then the Institute of Supply Management non-manufacturing index released at 61.6 against a consensus of 58. These numbers all of a sudden are important–so says the marketplace.
Finally these numbers, coupled with the wake up call from Amazon yesterday that they were moving their wages higher, has woke bond traders up and I see the 10 year at this moment is 3.12%.
It will be most interesting to see the wage component of the August employment report on Friday–when are we going to see strong wage growth? Right now wages are running 2.8 to 3% higher–will they pop higher yet? We believe so, but it is likely to be a month or two out before we begin to see some pressure higher. We anxiously await.