Global Business Confidence:

Global business confidence remains consistent with a global economy that is growing at just below its potential. Sentiment has been roughly unchanged since falling this summer in the wake of the European debt crisis. The most discouraging aspect of the survey is the slump in responses to the broad questions on present conditions and expectations regarding the outlook into next spring. The most encouraging aspect of the survey is that hiring and investment intentions continue to hold up reasonably well. Pricing is soft, but there is no sign of deflation.

FOMC Monetary Policy: 0.13%
The Federal Open Market Committee announced that it will expand its balance sheet and purchase $600 billion in Treasuries by the middle of next year in a major expansion of quantitative easing. This decision was in the context of an unemployment rate that is too high relative to the central bank's mandate and an inflation rate that is too low, with improvement "disappointingly slow." The committee said that it will keep the fed funds rate target in the 0% to 0.25% range "for an extended period." The decision to engage in further quantitative easing is an aggressive step and highlights the tenuous nature of the recovery and the high risk of a double-dip recession. One member voted against the statement, concerned about the risk of higher future inflation.

GDP:+ 2.0%
Real GDP grew 2% at an annualized pace in the third quarter of 2010. This matched the consensus estimate, and was a slight improvement from the 1.7% pace in the second quarter. Private inventories accounted for 1.4 percentage points of growth. Investment growth slowed dramatically, but consumer spending growth picked up, and government was a major contributor to expansion. Trade was a major negative. The economy will see sluggish growth over the next few quarters as the boosts from inventories and the stimulus fade, and the likelihood of recession over the next year is an uncomfortably high one in three. Growth will pick up later in 2011, finally leading to significant improvement in the labor market.

Agricultural Prices: +8.1%
The preliminary All Farm Products Index of Prices Received by Farmers jumped 8.1% in October compared with September, primarily from the weather-related impact on major grain crops in the U.S. and abroad. The crop index rose 11%, swamping the livestock index decrease of 0.7%. Corn, soybeans, eggs and milk fetched higher prices, while hogs, broilers, cattle and potatoes saw their values decline. The overall farm products index is 19% higher than a year ago, while the food commodities index rose 4.8% in the past month and 16% in the past year. Farmers paid 1.1% more for inputs than a month ago, with the yearly increase being 4.5%. Producers are paying more for feed grains, supplements, complete feeds and diesel fuel. Prices have eased for concentrates, feeder cattle and feeder pigs.

Employment Cost Index:+ 0.4%
Employer costs rose 0.4% in the third quarter of 2010, a notch below expectations and a downtick from the second quarter. Growth was driven by the second consecutive 0.6% expansion of benefits-the smaller of the two components of the index. Wages and salaries, the larger component, added 0.3%, down from 0.4% in the first half of the year.

Semiconductor Billings: 2.9%
Global semiconductor sales increased 2.9% in September. The three-month moving average of sales reached $26.5 billion, 26.2% higher than in September 2009. Sales growth in Europe and Asia picked up while they decelerated sharply in the Americas.
 

Productivity and Costs: +1.9%
Nonfarm business productivity rose 1.9% at an annualized rate in the third quarter of 2010, with unit labor costs falling 0.1%. The increase in hours worked was much smaller than the increase in output, leading to the increase in productivity. Hourly compensation rose before inflation and saw a small increase after inflation. Productivity growth remains strong as the recovery continues. At the same time compensation growth is weak because of the poor labor market. This is supporting profitability, and falling unit labor costs will eventually boost the demand for labor once business confidence improves.

Factory Orders (M3):+ 2.1%
New orders for manufactured goods rose 2.1% in September. Excluding transportation, new orders rose 0.4%. Nondurable goods shipments rose 0.9%, the second consecutive increase. Nondurable inventories increased 0.9%. Revisions to core capital goods were small and suggest that the manufacturing expansion is slowing.

Construction Spending (C30): +0.5%
Construction spending increased 0.5% from August to September but is still 10.4% below the level of September 2009. Private construction spending stayed approximately the same as its August level, with a large increase in residential spending being offset by a similar decline in nonresidential spending. Public construction recorded a moderate monthly increase for September. The September numbers are a good sign that construction is starting to bottom, and at least one of its components-public construction-is starting to return to good health.

Personal Income: -0.1%
Personal income unexpectedly fell in September, while spending growth slowed. Income was down 0.1% from August, the first decline in a year. Spending grew 0.2%, a deceleration from 0.5% the last two months (after upward revisions to both). Transfer income fell sharply as a result of the effects of unemployment insurance legislation, interest income continued to drop sharply, and wage income barely fell. Spending growth was led by a large increase in durable goods spending. The saving rate fell to 5.3%, its lowest level since March. Real spending grew 0.1% as the top-line PCE deflator rose 0.1%. Core prices were unchanged, as low inflation continues to support consumer budgets.

Jobless Claims: +20,000
Initial claims increased by 20,000 to 457,000 for the week ending October 30; the previous week's data were revised up slightly from 434,000 to 437,000. The increase was disappointing but is not outside the range that has carried through much of this year. Claims at this level are consistent with a still-struggling labor market. Continuing claims decreased by 42,000 to 4.34 million for the week ending October 23, though there are millions more not counted in this figure on extended and emergency benefits.

Challenger Report: -32%
The number of announced job cuts remained low in October at just under 38,000, confirming that the path of employment in the coming months will depend more upon employers' willingness and ability to step up hiring than on layoffs. The October figure was slightly higher than the September total but down 32% from a year ago. Entertainment and leisure accounted for the largest share of cuts in October, followed by government and nonprofits.

Monster Employment Index: -2 pts
Help-wanted ads decreased modestly in October, foreshadowing an overall weak pace of hiring over the coming months. The Monster employment index decreased by 2 points from September to October, as help-wanted ads fell in most regions of the country. Half of all industries posted a net increase in help-wanted ads during October, but these gains were more than offset by decreases in goods-producing industries, management and accommodation services.

MBA Mortgage Applications Survey: -5%
In the week ending October 29, the market index dropped 5% from the previous week amid a decrease in refinance applications; it now stands at 787.3. The refinance index fell 6.4% to 4,328.8. Meanwhile, the purchase index posted a mild gain, climbing 1.4% to 178.9.

Chain Store Sales: +1.6%
Chain store sales grew 1.6% in October, the worst result since April, despite several individual retailers beating apparently low expectations. Sales were hurt by warm weather that forced aggressive discounting. Luxury stores are still seeing gains as wealthier customers are slowly ramping up their purchases. Consumers are still spending, but not aggressively.

Vehicle Sales - AutoData: 12.3 mil
Vehicle sales strengthened further in October to a seasonally adjusted annualized rate of 12.3 million units, slightly more than had been expected. Although consumer fundamentals remain weak, sales are improving as pent-up demand builds and as fleet sales provide support.

Weekly Natural Gas Storage Report: +67.00 bcf
Working gas in underground storage rose by 67 billion cubic feet for the week ending October 29, just above the consensus estimate of a 64 bcf build. This report should slightly reduce natural gas prices.

Oil and Gas Inventories: +2 mil barrels
Crude oil inventories rose by 2 million barrels during the week ending October 29, modestly exceeding expectations of a 1.5 million-barrel build. Gasoline inventories fell by 2.7 million barrels, contrasting with the consensus estimate of no change. Distillate inventories fell by 2.7 million barrels, exceeding the consensus estimate of a 1 million-barrel decline. Refinery capacity utilization fell to 81.8% from 83.7%, contrasting with the consensus expectation of a 0.3% increase. Petroleum demand inched lower. This mixed report will support the recent upward trend in crude oil prices.

Source: Economy.com