The bond market is "on alert for easing" according to this morning’s WSJ. As the FOMC (Fed) statements have said, consumer spending is being hindered by several variables but most importantly by the high rate of unemployment. This is why the labor statistics are so important at this juncture of the economic cycle. This week’s release of September’s non-farm payrolls will be the last payroll report before the November 2nd and 3rd Fed meeting. The recent jobless claims reports signal a slight improvement in the payroll data, but not enough improvement to change economists` perceptions of the strength of the labor market. Expectations are for total non-farm payrolls to improve from losing 54k jobs last in August to no jobs lost (no jobs gained) in September, while private payrolls are expected to increase from 67,000 to 77,000.
Helping bond prices today is the decline in U.S. stock markets, a result of analysts cutting the ratings on Microsoft and Alcoa. Mortgage prices have improved by approximately .250% from Friday.
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