The September employment figures could be interpreted as signaling a slowdown in the economy with a pickup in wage growth, but don't count on it, ... The impact of hurricane Floyd might well have been larger than indicated.
The current level of initial claims data is consistent with a historically low unemployment rate.
This more pure measure has a nearly perfect prediction pattern dating back to 1966, with leads of 9-20 months.
As long as initial claims remain on a comfortable 320,000 glide-path into the new year, we should see continued payroll growth of 180,000 to 190,000.
The momentum in the economy and job market, combined with mortgage rates that remain near generational lows, continues to provide a solid backdrop for housing.
Higher energy prices could sap some strength from real growth, but sentiment is likely to bounce once Katrina disruptions abate.
Overall, trade deficits tend to widen with hurricanes, due to the Southeast region's bias towards exports to Latin America over imports.
Our guess is that the Fed is going to attempt to avoid any such signal in the minutes, but it's possible the market will attempt to find one anyway.
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