Key US data events reviewed - Nomura

Analysts at Nomura offered their review of the key US data from overnight.

Key Quotes:

"Industrial production: Industrial production rose 0.3% m-o-m in September after a 0.4% gain in August, mostly in line with expectations (Nomura: 0.4%, Consensus: 0.2%), and indicates steady output growth in September. The solid report may alleviate some concern regarding near-term industrial sector momentum after a weaker-than-expected August durable goods report. The Federal Reserve reported that Hurricane Florence lowered output growth by less than 0.1pp. The impact of the storm was less severe relative to hurricanes in 2017 due to differences in regional industrial composition. Exauto manufacturing output rose modestly by 0.1% and indicates steady output growth relative to last year as it registered 3.2% on a 12-month change basis."

"JOLTS: Job openings in the US reached a series high of 7136k in August, consistent with strong labor demand in an economy operating above potential, lifting the job openings rate 0.1pp to 4.6%. The quits rate stayed at 2.4%, its post-recession high, as workers remain comfortable with outside opportunities in a tightening labor market. Today's job opening numbers increased the job opening/unemployment ratio to 1.14 in August, the highest reading since JOLTS starting measuring vacancy postings in December 2000. Consistent with the recent acceleration in wage growth, labor market turnover has picked up notably in recent months, rising 0.25pp to 4.25%. Importantly, the increase in labor market turnover indicates upside risk to wage growth in the months ahead."

"NAHB housing market index: The NAHB housing market index rose to 68 in October from 67 in September, beating expectations (Nomura and Consensus: 66), with modest increases in both future and present single family home sales indices. The recent stabilization of softwood lumber prices may have meaningfully alleviated input cost concern among home builders. The strong labor market will likely continue to support housing demand. The prospective buyer traffic measure rose to 53 from 49. However, continued worsening of home affordability remains as a concern."

"GDP tracking update: The September industrial production report revised down auto assemblies in July and August while assemblies in September were slightly weaker than we expected. Lower estimates of auto assemblies in Q3 imply less buildup of auto inventories. Thus, we lowered our real GDP tracking estimate by 0.1pp to 3.4% q-o-q saar."