The most eventful day of most months is here. The monthly jobs reports just came out and the report was slightly worse than expected. In September the economy shrank by 264,000. The expected number was 225,000. The average work week fell back to 33 hours a week from 33.1 in August. That's a very troubling number. The average work week was shrinking until August when it began to grow again. This number is at all time lows. Companies will cut back hours before they fire and layoff and so this number is more a leading indicator than a lagging indicator, which is what the overall jobs number is. This is also the 21st straight month that jobs shrank. The unemployment rate is now 9.8%.
Both equities and bonds are reacting as expected. All three indices were down tremendously yesterday. The ISM index came out about an hour in yesterday. That was worse than expected and things turned bloody after that. The Dow was down 203, the NASDAQ was down 64.94 and the S&P was down 27.22. The Dow is down over one hundred today. Meanwhile, the ten year U.S. Treasury bond is at 3.10%. That's so low I would need to check how long it's been since we have seen it there. It's been at least half year in my estimation. Mortgage rates are now solidly below 5% on the 30 year mortgage and with a few more good days they may test 4.5%. Oil is currently at $68.79. That's down nearly $2 from the close yesterday but up over the last few days.
Right now is a critical time for the economy. September auto sales were anemic. That's a sign that cash for clunkers took future sales away. The first time homebuyer's credit will go away in November. We are soon going to find out if the economy is leveling and improving or if we saw blips from short term artificial stimuli like cash for clunkers and the credit.
Markets around the world are down nearly universally this morning as well. The Hang Seng in China is down 2.77%, the NIKKEI in Japan was down 2.47% and the Straits Time Index in Singapore was down 1.99%. The broader Chinese index was even but that's the only major index in both Europe and the Far East that wasn't down today. In Europe, the FTSE in London was down 1.63%, the DAX in Germany was down 1.71%, and the Spanish index was down 2.08%.
The Dollar is mixed this morning. It's up by .21% against the Euro, up by .73% against the British Pound but down by .5% against the Japanese Yen.