November 30, 2022 – Economic News

• November 30, 2022
• realestatelife
• Announcements, Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate Finance, Recession, Your Real Estate Life

Taking it to the House: Weekly Mortgage Applications fell by -0.8%, led by a steep decline of -12.9% in Refinance Applications, Purchase Applications were actually up 3.8%. The October Pending Home Sales Index was better (less worse) than expected -4.6% vs. est. of -5.2%

Jobs, Jobs, Jobs: November ADP Employment Change was much weaker than expected, 127K vs. est. of 200K and showed about 100K loss in the Manufacturing Sector. October Job Openings and Labor Turnover Survey (JOLTS) showed unfilled jobs at 10.334M vs. est. of 10.300M

Rosie the Riveter: November Chicago PMI contracted significantly with a 37.2 reading vs. est. of 47. Its the worst reading since May of 2020 (32.3)

GDP: The 3rd QTR GDP was revised upward from 2.6% to 2.9%.

The Talking Fed: We have a very busy afternoon with Fed Chair Powell speaking at 1:00and then we get the Fed’s Beige Book at 2 pm. We will also hear from Cook and Bowman.

Data this morning way off the estimates; ADP Nov jobs were expected +200K, as reported job growth was anemic, 127K down from 239K in October. The preliminary Q3 GDP, the second look, expected at 2.7% from 2.6% on last month’s advance look; GDP increased 2.9%. The annual rate of personal expenditures increased to 1.7% from 1.4% on the advance release and was expected at 1.5%. The initial reaction to the data was not much, stock indexes in futures trade generally unchanged, the 10 yr. note prior to the reports down 4 bps, by 9 am ET +2 bps and early pricing of MBSs down 14 bps from yesterday.

October US trade deficit expected at -$90.8B, the deficit was -$99.0B; imports +0.9%, exports -2.6%.

The day’s headline is Jerome Powell’s speech at 1:30 pm. He isn’t expected to soften his tone that has been reverberating from all Fed officials’ comments over the last two weeks. Likely confirming the Fed will slow its rate increases going forward (50 bps in two weeks at the Dec FOMC meeting) then 25 bps as needed moving forward from there. Expect him the continue reminding the Fed is data dependent and will adjust as data dictates. Not expecting any surprises but today’s weak job growth from ADP and higher Q3 GDP might get noticed. Powell will cement expectations that the Fed is not about to pivot and will keep tightening. He may, however, indicate that the next hike will be smaller as is widely expected. Data today including the ADP jobs report may signal a downshift in activity to embolden Fed doves.