The U.S. Created 263,000 Jobs in September… The unemployment rate fell slightly, to 3.5%.
What it means— That’s not what investors wanted. A weak jobs report would have supported the notion of a Fed pivot and given investors a reason to push stocks higher. While the 263,000 jobs created isn’t a blockbuster number, the falling unemployment rate gives the central bankers cover to raise rates aggressively the ﬁrst week of November if everything remains the same. The report also showed that average hourly earnings were up 5% over the last 12 months, so workers are still losing purchasing power.
OPEC+ Cuts Output by 2 Million Barrels Per Day… Citing a global economic slowdown and easing oil demand, the oil producing cartel voted to reduce the overall oil production quota for the group by two million barrels per day.
What it means—There’s both less and more to the decision than meets the eye. Several members produce less than their quota already. Since the announced cut is from the group’s baseline, the actual cut will be about 500,000 barrels per day, and that’s in a global market of around 100 million barrels per day. The change won’t make a physical difference in the amount of oil available, but it does send a strong message about the price. The OPEC+ members used the meeting and production cuts to signal that they see $100 per barrel as a level of support and aren’t concerned about Western nations having to dig deep to pay for it. If the U.S. and Western European countries stick to their Russian energy sanctions in 2023 and beyond, we might see the price of oil melt up instead of easing below $75 per barrel.
Job Openings Fall 1.01 Million, Still at 10.1 Million… If you don’t include the pandemic, the number of job openings in the U.S. have fallen the most in history. Even so, we still have more than 10 million openings, or almost two openings for every unemployed person.
What it means— By itself, the drop in job openings from a near-record high to a still really high number isn’t that interesting, but in the context of a weaking economy that might give the Fed a reason to pivot, the drop in openings was huge. Investors took the data point as a strong signal that the Fed might not raise rates at the pace it suggested at the September meeting, which would mean that a reversal to easier monetary policy is just that much closer. That seems like a lot to read into one number.
Atlanta Federal Reserve GDPNow Model Estimates Third-Quarter GDP Growth at 2.7%… The estimate was 0.3% on September 27 but has been pushed higher by revisions to the National Income and Product Accounts (NIPA) at the Bureau of Economic Analysis.
What it means— The GDPNow model has been the best GDP forecasting tool for years. It was eye-catching to see it jump from 0.3% to almost 3% in a matter of days at the end of the quarter. If the estimate is close to correct, then the Fed will be comfortable raising rates, secure in the knowledge that it hasn’t brought on a recession.
Researcher Develops Laser That Can Kill Bugs From Five Feet Away… We’ve all been there. We see a cockroach or some other gross bug and want to kill it, but not be that close to it. Now Ildar Rakhmatulin, a research associate at Heriot-Watt University in Edinburgh, Scotland, has solved the problem. Using cheap, off-the-shelf technology, Rakhmatulin used his interest in machine learning and engineering to make this dream a reality.
His invention uses a small computer to process digital signals from two cameras to lock in on the bug’s position before directing a galvanometer to zap it with the laser. Even though Rakhmatulin open-sourced everything so that others can build their own bug lasers, he still warns people to take precautions. The device might kill bugs, but the laser still can take your eye out.
Data supplied by HS Dent Research
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