Will Powell Address the QCEW Job Contraction?

Employment data gap opening up between QCEW and NFP reports

Highlights

• Employment data gap opening up between QCEW and NFP reports

• The dive in the personal savings rate is the real story behind GDP growth

• Real world evidence of consumer frugality paints a different picture than the BLS data

• Is the Fed really addressing “irrational exuberance?”

While We Were Sleeping

Global equities are on the mixed side — U.S. futures are trading a tad lower as the S&P 500 and Nasdaq confront crucial tests of their 50-day trendlines. European markets are off -0.6% and losing ground by the hour. Asia was up for the most part: Japan’s Nikkei 225 (+1.2%; helped along by an in-your-face +3.8% MoM rebound in March industrial output, exceeding market views of a +3.3% gain), Thailand (+0.6%), Hong Kong (+0.3%), Singapore and India (+0.3% a piece), and Korea (+0.2%). These helped blunt losses in Taiwan (-0.5%) and China’s Shanghai Composite (-0.3%)

Bond yields across the pond and in the U.S. are up a touch (+2 basis points to 4.63% for the 10- year T-note yield) but have fallen across Asia (-6 basis points in Australia and New Zealand to 4.42% and 4.88%, respectively… and by -4 basis points in China to 2.31%). Bond markets in the Eurozone may not have liked the fact that Germany’s inflation rate picked up a little in April to +2.4% YoY from +2.3% alongside the upside surprise on area-wide growth (+0.3% QoQ, vs +0.1% expected), but what they seem to have missed was the very encouraging drift lower in the core rate to +3.0% from +3.3% (this paved the way for a move down to +2.7% from +2.9% for the entire euro area).