Good Monday AM from your Hometown Lender,

Not a lot of data out today (the week’s schedule is below).

There are, though, large Treasury auctions today and tomorrow. The added supply in the market is putting some pressure on bonds with the 10-yr back to 4.29%. This is a moderately busy week for data, and it starts tomorrow with Durable Goods and Consumer Confidence, Wednesday brings GDP, and Thursday has unemployment and PCE (the Feds favorite inflation gauge). There is a lot to digest. The positive spin is that markets have already adjusted expectations for rate cuts to three for the year with the first starting in June so even if this week’s data come in stringer than expected, there is likely not much more damage to be done to interest rates.

I still believe (maybe just a wish) that we could see a cut in May but there are few in my camp now.

I just don’t believe the recent jobs data is accurate and even if it was, it is not accounting for the fact that most of the jobs created were temporary. That retail sales (which is a hard number) fell off a cliff speaks more to the trajectory of the economy than does an ethereal seasonally adjusted jobs report which is misleading (great graph below). Anyway, there is a lot of data out later this week so be alert.

The last jobs report showed 353,000 new jobs were created but that was a seasonally adjusted number.

Every year, many businesses hire workers ahead of the holidays and then lay off some in January. To better gauge the trend in hiring, the Labor Department accounts for these seasonal patterns, so that a big drop in actual January payrolls often shows up as a seasonally adjusted gain. Few question this basic practice. But many investors believe that the adjustment for this January was overly aggressive, arguing that businesses laid off fewer workers than normal because they had hired less in the months before. In effect, they say, the calendar has become less important for businesses. As a result, many expect the big gain in January to be offset by weaker numbers in the coming months, when the Labor Department anticipates a seasonal rebound in hiring. Discounting the importance of January data extended to the one notable exception in the run of strong economic reports. Data released Thursday showed that retail sales fell 0.8% last month, a sign that resilient consumer demand might finally be abating.

Please remain safe and healthy, make today great!