Better than expected initial claims number raises odds for December move by Fed

A big drop in initial claims for unemployment reported this morning sets the stage for tomorrow’s report on jobs in September. A strong showing tomorrow would add to conviction in the financial markets that the Federal Reserve will raise interest rates at its December 14 meeting. According to the CME’s FedWatch, the Fed Funds Futures market is now pricing in a 63.9% chance of a December increase

Service sector weighs in with more economic uncertainty ahead of September Fed meeting

All this year the U.S. service sector has been making up for weakness in manufacturing. Not in August. The Institute for Supply Management’s non-manufacturing index slipped to 51.4 in the August survey. That’s down from 55.5 in July and is the lowest reading since February 2010. The ISM’s manufacturing index, released on September 1, showed that the sector contracted in August.

Economy adds 161,000 jobs in October, September total revised upwards to 191,000; Fed on course for December interest rate increase

Today’s economic news–with its worries about growth–is an anxious set up for tomorrow’s August jobs report

Manufacturing activity in the United States contracted, unexpectedly, in August, according to the Institute for Supply Management’s manufacturing index released today. The index fell to 49.4 in August from 52.6 in July. That was the biggest drop in the index since January 2014 and was enough to push the index below the 50 level that separates contraction from expansion. The median forecast among economists was for reading of 52.