Weekly Economic Report 10.2.26
Despite a weaker than expected payroll employment report – which gets outsized attention from financial markets -- the preponderance of the evidence this week suggests sustained strong growth as we move through the peak of the manufacturing cycle. The revised GDP data show that the economy has been running hotter than earlier reported. The ISM data confirmed we are still running hot in August. The ADP data said hiring remained strong. The personal income data confirms that employers are earning strong profits, and that workers, though facing wage pressure, are spending -- a lot. Initial and continuing claims data show no layoffs. The household employment report rose a robust 406,000, after 569,000 in July. The unemployment rate rose fractionally. Though higher than June and July, it was lower than any other month since June 2025. Only the payroll employment data disappointed – but even there, the see-saw pattern of weak month after strong month, still suggests solid, if not stellar growth, in hours worked. Bottom line, we expect solid economic data for the rest of the year as strong momentum from profits growth underpins both hiring and investment.
Comments