Succinct Summation of Week’s Events 10.6.17 (plus the other side of deficits)

The ever so popular weekly summation is once again below for your review.  The economic data was mostly positive with the obvious negative being the massacre in Las Vegas and payrolls being down, mostly attributed to the fact that 1-1/2 million people did not show up for work in September due to the hurricanes.  It was more difficult than usual this weekend to find a Sunday bonus but I think this article from Thursday's New York Times may qualify as it is an excellent explanation of deficits and why they're not necessarily a bad thing.  I got this same lecture in my first econ class in the MBA at the University of Southern California in 1979 and I can see that the basic principles remain unchanged.

Succinct Summation of Week’s Events 10.6.17

October 6, 2017 6:00pm by Barry Ritholtz

Succinct Summations for the week ending October 6th 2017

Positives:

1. Average hourly earnings increased by 0.5%
2. Unaffected by hurricanes, September’s Household Survey saw a job gain of 906k
3. Unemployment fell to 4.2%.
4. New highs in markets as hopes were rekindled for tax cuts/reform as DC shifted focus (again).
5. Auto sales totaled 18.47mm in September, well over estimates of 17.15mm; upside surprise was wrecked vehicle replacement due to the storms.
6. Factory orders rose 1.2%, above the 1% expected increase.
7. Construction spending rose 0.5% m/o/m and 2.5% y/o/y.
8. MBA mortgage applications to buy a home rose 1% w/o/w;  up 4.7% y/o/y
9. PMI manufacturing came in at 53.1, up from 52.8 and slightly above the 53.1 expected.

Negatives:

1. Las Vegas tragedy reveals the dysfunctional democracy that is America, incapable of passing the simplest most widely supported legislation if it is opposed by special interests. Despite huge majorities of Americans favoring modest controls on assault weapon purchases or background checks on Terrorists, and gun legislation is all but impossible to pass.
2. Nonfarm payrolls fell from 156k previously to -33k, (assuming this is hurricane Harvey and Irma related). BLS noted 1.47mm people that didn’t show up for work due to the ‘bad weather.’
3. ADP employment report came in at 135k, down from 237k previously and below the 140k expected.
4. Previous month’s construction number was revised down from -0.6% down to -1.2%.
5. Retail sales in the Euro region fell m/o/m in August by .5% instead of rising by .3% as forecasted.
6. Tom Petty (1950 – 2017):

  “Well I know what’s right
  I got just one life
  In a world that keeps on pushin’ me around
  But I’ll stand my ground”  

Tom Petty And The Heartbreakers – I Won’t Back Down.

How We Think About the Deficit Is Mostly Wrong - The New York Times