Consumer credit rose by $15.9 billion in September, $14.5 billion of which was non-revolving credit. Not that anybody cares. What people care about is…
The Employment Situation for October was mixed. A net new 214,000 jobs were created, and the unemployment rate fell -0.1% to 5.8%. Average hourly earnings rose 0.1%, while the average work week was unchanged at 34.6 hours. Overall, the number of people employed rose by 683,000, while the number of people in the labor force increased by 206,00, bringing the labor force participation rate up 0.1% to 62.8%. Using the historical average labor force participation rate, the real rate of unemployment fell by -0.3% to 10.53%.
Chain stores reporting sales for October are citing unseasonably warm weather for sizable slowing in sales growth. This points to a disappointing government retail sales report for last month.
Challenger’s layoff count, at 51,183 in October is up sharply this month, but from a 14-year low in September of 30,477.
Gallup’s US Payroll to Population employment rate for October was 44.4%, down from 44.8% in September.
Nonfarm productivity growth for the 3rd Quarter rose an annualized 2.0%, while unit labor costs rose 0.3%.
Initial weekly jobless claims fell 10,000 to 278,000. The 4-week average fell 2,000 to 279,000. Continuing claims fell 39,000 to 2.348 million.
The Bloomberg Consumer Comfort Index rose 0.9 points to 38.1 in the latest week, the second-highest reading since 2007.
The Fed’s balance sheet fell $-0.2 billion last week, with total assets of $4.487 trillion. Reserve bank credit fell $-5.8 billion.
The Fed reports that M2 money supply rose by $33.6 billion in the latest week.
It seems like every pundit in the world is now ready to give the GOP Congressional majority advice on what they should do for the next two years. It would be nice if they’d tell the lame duck Dems and President how they should act as well. But I’m of the opinion these will be a very interesting two months.
The question I have, after the Republican victory, is what lessons they’ve learned from this big win? Here are a few that I think they should keep in mind:
1. While this was a big win, it doesn’t signal that the same will happen in 2016. We heard that sort of “wisdom” spouted after the impressive GOP win in 2010 – momentum from 2010 was sure to sink Obama in 2012. But it didn’t at all translate in the 2012 presidential race. Lesson: while there may be some momentum, what happens in the next two years is much more important than what happened on Tuesday.
2. Guess who focused on social issues? Guess who lost? “The war on women” was beaten to death. In fact, Colorado’s Mark Udall was being referred too as “Mark Uterus” with his almost singular focus on that. And then there was Wendy Davis’ attempt to cash in on it. Climate change was also a bust. Republicans were disciplined, focused on ObamaCare, the economy, jobs, etc. It paid off. You have to wonder if they’ll remember that. There are plenty of important and broad issues to campaign on. You don’t have to resort to divisive wedge issues to rally your base as those type issues tend to alienate badly needed independents. Lesson: stay focused on broad national issues and present solutions.
3. If I were to take anything from the election, it wouldn’t be Harry Reid’s interpretation. Reid now thinks everyone should “work together” because, you know, that’s what the American people want. Of course, Harry Reid knows next to nothing about what the American people want and has proven that time and time again. Certainly, if possible, bi-partisan is good. If not, then screw em. Yes, I know that with Obama in the White House, most of what they do is likely to be vetoed. But then it is up to him to explain why nothing is happening, not the Republicans. He becomes the “obstructionist“. Politics 101. Of course the GOP has flunked that course many times. Lesson: do your job and make the other party do theirs. If they do, then it helps build a very nice case that they need to go.
There are probably many more you can think of. I’m pitching these up here because they seem to me to be common sense lessons from this election. Yes, impressive win. Got it. Now what? What have you learned?
Well, if history is any indicator, many of the same lessons have been available to the GOP in other elections and they’ve essentially ignored them. The question of this day is “will they repeat history”?
I’m taking a break from my post-election schadenfreude to bring you the same old, boring economic stats. Bruce has already covered the election aftermath well, and I can’t think of much to add, except to note that the President, in his presser this afternoon, assures us that there’s no reason to try and read the tea leaves of this election. It’s true meaning is essentially unknowable. Clearly, there was a lot of anti-incumbent sentiment, but there’s no way for us to really glean any larger implications for the president’s policies from all this. What’s really important now is to learn how the Republicans will reach across the aisle to get things done in a bipartisan fashion.
Anyway, today’s stats:
The MBA reports that mortgage applications fell -2.6% last week, with purchases down -3.0% and refis down -6.0%.
ADP’s estimate for private payroll growth for October is 230,000, which was generally in line with expectations.
Gallup’s U.S. Job Creation Index fell -3 points to 27 for October, down from the six-year high of 30 in September.
The ISM’s Non-Manufacturing index fell -1.5 points to 57.1 in October.
The JP Morgan Global Composite PMI slowed for the third straight month, down -1.3 points to a still-positive 53.6. The Global Services PMI fell -1.6 points to 53.7.
On a side note, I don’t think that both the ADP Employment report, which shows an increase of 17,000 private payroll jobs over last month, and the Gallup Job Creation Index can both be right. We’ll know which one was correct on Friday, with the release of the October Employment Situation.
Hard to call last night anything but a rout for Democrats as in “it was worse than they expected”. Pre-election polls seemed to indicate any number of tight races that could have gone to Democrats. But the results were certainly not at all in line with those polls. Nate Silver now tells us that many of the polls were skewed toward Democrats. When the results started coming in, they were shocking to many on the left. Mitch McConnell wasn’t really in danger at all. Perdue stomped Nunn in GA. Tom Cotton blew incumbent Mark Pryor away in Arkansas. Kay Hagen, a sure fire winner, down in flames. Those that predicted +8 GOP senate seats were right, even as the left had said that sort of a prediction was extreme.
And there were even more surprises in store. A 78 year old incumbent Republican senator in Kansas defeated a pseudo-independent handily. Colorado went red. Charlie Crist has now lost as Republican, Democrat and Independent. IL dumped an incumbent Democratic governor for a Republican. MA and MD put Republicans in the Governor’s mansion as well.
There were some firsts – Joni Ernst became the first woman to represent Iowa in the Senate – as a Republican (as well as the first female combat vet in the Senate). The GOP’s first black female, Mia Love, won Utah’s 4 district and represent it in Congress. And the first black Senator since reconstruction was elected in the racist South (just ask Mary Landrieu, D- LA about that) as a Republican from SC. An openly gay Republican was elected to Congress, and finally, the youngest women elected to Congress won an open district in NY that has been traditionally Democratic for the Republicans.
Democrat Mary Landrieu of LA faces a runoff she’s likely to lose and in Alaska it appears that Sullivan may edge Begich.
Wow. So what does it all mean? Well, we’ll see, but you know me, despite all this “change” I really don’t expect much to really change in today’s highly partisan atmosphere.
Maybe though, we ought to consider some other interesting things this election may portend. For instance, 24 Senators who voted for ObamaCare, no longer are Senators:
On the Senate side, going into Tuesday’s elections, 24 senators who voted for Obamacare were already out or not going be part of the new Senate being sworn in on January.
To be sure, it isn’t fair to attribute all of the turnover in the chamber to Obamacare. Many senators voted for Obamacare and lost re-election battles in which they were hit hard for their support for the law, and other Democrats were forced to retire because they had no hope of getting re-elected given their support for the law. But in some cases — such as John Kerry leaving his seat to become secretary of state, or Robert Byrd passing away — Obamacare clearly had nothing to do with it.
Obviously … but that’s still a large toll and certainly part of the political butcher’s bill. And then there’s the Immigration Reform Bill which most people viewed as an amnesty bill, and those who supported it:
Sen. Mark Pryor of Arkansas voted for the Gang of 8 bill. He’s GONE.
Sen. Kay Hagan of North Carolina voted for the Gang of 8 bill. GONE.
Sen. Mark Udall of Colorado voted for the Gang of 8 bill. GONE
Sen. Mark Begich of Alaska voted for the Gang of 8 bill. Almost certainly GONE
Sen. Mary Landrieu of Louisiana voted for the Gang of 8 bill. She will probably be GONE after a January runoff.
Alison Grimes supported the Gang of 8 bill in Kentucky. DEFEATED
Michelle Nunn supported the Gang of 8 bill in Georgia. DEFEATED
Greg Orman supported the Gangof 8 bill in Kansas. DEFEATED
Bruce Braley supoorted the Gang of 8 bill in Iowa. DEFEATED
Jeanne Shaheen of New Hampshire and Mark Warner of Virginia voted for the Gang of 8 bill and BARELY SURVIVED against longshot challengers.
Remember, this supposedly is Obama’s next priority. Does he really want to muddy Democratic 2016 election waters this early in the game?
Hillary Clinton put her political clout and even her political future on the line in this election — from Massachusetts to New Hampshire and in races clear across the country — and as the dust settles this morning we’ll see how it paid off.
The news that Republicans took control of the Senate despite Clinton’s best efforts doesn’t bode well for her desire to become the next president of the United States.
Because if you think Hillary Clinton spent all that time and money crisscrossing the country trying to get fellow Democrats elected or help them keep their seats out of the kindness of her heart — you are sadly mistaken. The goal was to have as many of them beholden to her as possible — and to show that she is someone who can get it done. “It” being to raise massive amounts of money and win votes.
The GOP claimed control of the Senate yesterday by picking off Democratic incumbents in Arkansas, Colorado and North Carolina and holding control of key seats in Kansas, Georgia and Kentucky, while picking up a vacant seat in Iowa. Hillary or Bill Clinton stumped in most of those states, and they wanted winning Democrats there who would owe them favors. She came out of the evening with at least one key win.
Not impressive. In fact, the Clinton’s couldn’t even stave off a loss in their “home state” of Arkansas. Perhaps the “inevitable” coronation of Queen Hillary isn’t quite as inevitable as she and the left might think.
So, certainly, lots to think about and lots to discuss. We’ve again seen a wave election. Past wave elections haven’t produced much in the way of positive change. Is there any reason to believe this one will?
Question of the day.
Oh, and in case you were wondering, this was indeed a repudiation of Obama.
ICSC-Goldman reports weekly retail sales fell -1.6%, and rose only 1.8% on a year-over-year basis. Redbook reports retail sales rose 3.9% on a year-ago basis, compared with 4.4% in the prior week.
Gallup’s October Economic Confidence Index jumped to a monthly reading of -12 in October–the most positive score since the -12 of July 2013.
The US trade deficit grew by $2.9 billion in September, growing to $43 billion.
September factory orders were better than the previous month’s but still fell by another -0.6%, following August’s -10.1% decline.
Thanks to the Progressive movement at the turn of the last century, California, like several other states, has ballot propositions that the voters can approve or disapprove to get around the corrupt pols in the state capital. Here are the propositions on tap for tomorrow.
Proposition 1: Water Bond. Funding for Water Quality, Supply, Treatment, and Storage Projects.
Authorizes $7.545 billion in general obligation bonds for state water supply infrastructure projects, including surface and groundwater storage, ecosystem and watershed protection and restoration, and drinking water protection.
First, we don’t have a lot of space to borrow, especially with a $40 billion train line to build. Actually, we don’t have the money to pay for the $40 billion—some say $63 billion—train. So, let’s find the money in the annual budget for this. I’m sure there’s some spare change lying around with a $108 billion dollar budget in 2014, which is, by the way, $7 billion more than the 2013 budget.
Proposition 2: State Budget. Budget Stabilization Account. Legislative Constitutional Amendment.
Requires annual transfer of state general fund revenues to budget stabilization account.
This seems like a minimal nod to fiscal responsibility. I’ll buy it.
Proposition 45: Healthcare Insurance. Rate Changes. Initiative Statute.
Requires Insurance Commissioner’s approval before health insurer can change its rates or anything else affecting the charges associated with health insurance.
First of all, we already intentionally cut the insurance commissioner out of this loop by creating an independent commission to review rate changes. We did that because the insurance commissioner is an elected political hack who already has too much scope for hackery. If this passes, then health insurers will be prevented from raising rates by whatever San Francisco hippie gets elected insurance commissioner. Which sounds nice until you realize that insurers will lose money and simply leave the state.
Proposition 46: Drug and Alcohol Testing Of Doctors. Medical Negligence Lawsuits. Initiative Statute.
Requires drug testing of doctors. Requires review of statewide prescription database before prescribing controlled substances. Increases $250,000 pain/suffering cap in medical negligence lawsuits for inflation.
Nobody wants to be treated by a crack-addled doctor, right? So, who could be against this? Well…me. Here’s the thing: This has very little to do with ensuring doctors aren’t drug addicts, and everything to do with trial lawyers looking for big malpractice paydays, by increasing payouts for malpractice lawsuits. That means malpractice insurance premiums will skyrocket, and doctors will leave the field…or the state. The doctor drug testing is eyewash to hide a trial lawyer money-grab. Screw those guys.
Proposition 47: Criminal Sentences. Misdemeanor Penalties. Initiative Statute.
Requires misdemeanor sentence instead of felony for certain drug and property offenses. Inapplicable to persons with prior conviction for serious or violent crime and registered sex offenders.
Right now, we have mandatory sentences for non-violent drug offenders. So we have to make room for them in prison. We don’t have that room, so we let robbers, muggers, and rapist, et al., go free instead. If you commit a non-violent offense, you simply shouldn’t go to jail, period. We need to keep people who hurt people in jail. If your crime is having a gram of coke or 2 ounces of weed, I can’t even count the number of shits I don’t give about imprisoning you.
Proposition 48: Indian Gaming Compacts. Referendum.
A “Yes” vote approves, and a “No” vote rejects, tribal gaming compacts between the state and the North Fork Rancheria of Mono Indians and the Wiyot Tribe.
Do you know what I care less about than imprisoning non-violent criminals? Whether or not Indians can have casinos, and whether they can have them outside their tribal lands. Besides, I really like the buffets.
So, there you have it: All of the propositions on the ballot. I wouldn’t dream of telling you how to vote, but I am telling you how I am going to vote. With that in mind…you know what to do.
Motor vehicle sales came in at a 13 million annual pace, while overall sales are expect to hit a 16.7 million rate.
Gallip’s daily self-reported spending measure averaged $89 in October, versus $87 in September.
The Markit PMI manufacturing index in October fell -1.6 points to 55.9.
Construction spending unexpectedly declined -0.4% in September, and is up only 2.9% from a year ago.
The J.P. Morgan Global Manufacturing PMI was unchanged at 52.2 in October.
Funny stuff from the “you just can’t make this stuff up” department. Retiring Senator Tom Harkin (D-IA):
“In this Senate race, I’ve been watching some of these ads,” Harkin said at the Story County Democrats’ annual fall barbecue last week honoring the retiring senator. “And there’s sort of this sense that, ‘Well, I hear so much about Joni Ernst. She is really attractive, and she sounds nice.’”
“Well I gotta to thinking about that. I don’t care if she’s as good looking as Taylor Swift or as nice as Mr. Rogers, but if she votes like Michele Bachmann, she’s wrong for the state of Iowa.”
“I believe if my name had been John Ernst attached to my resume, Sen. Harkin would not have said those things.”
I believe she’s right. It is kind of like if Nikki Haley’s name had been Nick Haley, she likely wouldn’t have been called a “whore” by her Democratic opponent, huh?
Harkin’s comments were met with loud applause from the audience.
A Democratic audience, it can be reliably reported.
So if we grade Harkin’s remarks as the left would had they been pinned on someone from the right, at a minimum you’d have seen him tagged as arrogant, patronizing, sexist and a soldier in the “war on women”, no? Ernst is getting the Sarah Palin treatment from Harkin, something perfected by the left in 2008.
Just for fun and to check on the acceptability of what Harkin said (before the left tries to tell us what he said isn’t offensive), let’s reword that slightly and make it say something no one ever said, but makes an instructive point:
“In this Presidential race, I’ve been watching some of these ads,” Harkin said at the Story County Democrats’ annual fall barbecue last week honoring the retiring senator. “And there’s sort of this sense that, ‘Well, I hear so much about Barack Obama. He is really attractive, and he sounds nice.’”
“Well I gotta to thinking about that. I don’t care if he’s as good looking as Sidney Poitier or as nice as Oprah Winfrey, but if he votes like Nancy Pelosi, he’s wrong for the United States.”
Any question about how that would be treated by the left?
This week’s podcast is now available at the podcast page. This week, it’s all misogyny and fast cars.