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so on the economy well uh it's been on fire whether we're talking about consumption housing uh capital spending uh even trade has picked up fairly dramatically uh and so we are um i'm just one sec i'm gonna hang up uh so um we we are uh always on the lookout for okay what next uh and today's employment report uh gave us a lot of information but before uh i go there uh i'd like to talk about uh one thing that has changed relative to our expectations um uh before and and relative to uh uh the trends that were in place uh in the last six months uh inventories have started building again that's a big difference and as i as i mentioned on many of these calls for months now businesses have been scrambling particularly on the durable and non-durable side they've been scrambling to keep up with demand well they are beginning to catch up so that now we're seeing inventory increases now that's not a bad thing we need inventories to keep uh up with uh final sales growth but that is a change and so the certainty of a v-shaped recovery uh that was born out of this idea that the businesses were scrambling to to keep up with consumers that is no longer the case what would make that the case once again is an extremely strong holiday season and i think we're going to see that there are a few metrics we can use already jp morgan just today reported that its credit card growth was up 15 percent over the the black friday cyber monday uh long weekend uh that is an extremely strong number up 15 percent uh if you look at the s p 500 um you take the average for september and see where we are now we're up about nine percent uh and typically retail sales uh follow that that number so nine percent up from the september average again that would be an extremely strong holiday season uh and so the signs are good in the employment report today we did get a few weak spots first of all the entire report was weaker than expected with non-farm payroll uh payroll employment up 245 000 expectations were 460 000 more important to us was household employment which includes many more small businesses was actually down i think roughly 70 to 77 000 somewhere in that range so an actual decline in the broader measure of employment the unemployment rate did tick down two tenths but that's because the labor force shrunk so that probably means that there are people more people not looking for jobs maybe because we're approaching the holiday season and i should say more people than normal not looking for holiday jobs because this this uh statistic is seasonally adjusted uh the weak areas within the report were retail and i think we understand that with the resurgence of the coronavirus and and the restrictions now being placed on restaurants and uh other other um retail establishments tech was flat and that's very interesting to us it it could be that productivity is increasing in the tech sector itself because of the digitalization of everything and uh government spending was the biggest weak spot now many uh state and local governments are not allowed to run deficits and so they've had no choice but to lay off layoff people so that is an issue there may be in the fiscal package uh some shoring up although not nearly as much as as many in congress wanted a little shoring up of the hardest hits uh state state and local governments the other weak spot in the employment report was a significant drop in the manufacturing work week a 0.5 percent drop or 0.2 hours i pay a lot of attention to that and it goes back to that inventory discussion if inventories are now keeping up with final demand then this notion that manufacturers have to scramble to catch up uh with final demand that no longer is the case and so that's probably explains why the manufacturing work week went down uh the the positive um part of the report was average weekly earnings on a year-over-year basis its growth rate or their growth rate accelerated from 5.6 percent to 5.9 percent the other thing which i didn't mention earlier but which is still true is the saving rate is still high uh so with the october report we saw that the saving rate dropped to 13.6 percent but again very high by historical standards it was roughly eight percent before we headed into uh the coronavirus crisis and uh and so it means that the consumer still has more firepower power as many people have noted uh consumers are not taking big trips um for thanksgiving and the holidays this year and therefore they have that much more in spending power elsewhere so that's another buttress to consumption and we also got today the durable goods report which is reinforcing the surge in capital spending that is underway and we think a lot of that surge has to do with the digitization of uh the global economy i mean it's hap it's it's much more profound than i i believe even we expected at the beginning of the coronavirus and i'll give you a few company examples of that later on as far as market indicators uh well the commodity with the phd that would be copper um just have to hang this thing up again uh the commodity with the uh phd so that's copper that has broken out it's broken out to the upside in an absolute sense and it has broken out relative to gold so that is a big cyclical indicator uh one of the reasons it may be breaking out uh is that the dollar is breaking down uh and uh and that means two things i mentioned some inflation uh indicators may may be pointing in the wrong direction uh the dollar uh would be one of those uh the uh the the declining dollar also does a good thing from at least from an optical point of view and that is it bolsters earnings uh s p earnings u.s earnings and so um there there are two impacts there we're focused on it
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