- The Change in Non-farm Payrolls for January was 193K versus estimates of 250K and an upwardly revised 140K in December.
- The Unemployment Rate for January fell to 4.7% versus estimates of 4.9% and 4.9% in December.
- The Change in Manufacturing Payrolls for January was 7K versus estimates of 7K and a downwardly revised -1K in December.
- Average Hourly Earnings for January rose .4% versus estimates of a .3% increase and a .4% gain in December.
- Final Univ. of Mich. Consumer Confidence for January fell to 91.2 versus estimates of 93.4 and a prior estimate of 93.4.
- Factory Orders for December rose 1.1% versus estimates of a 1.0% gain and an upwardly revised 3.3% increase in November.
- ISM Non-Manufacturing for January fell to 56.8 versus estimates of 60.0 and a reading of 61.0 in December.

BOTTOM LINE: American employers added 193,000 workers in January and the unemployment rate fell to 4.7%, the lowest since July 2001, as the US economy strengthened and builders took advantage of warm weather, Bloomberg said. The economy added a revised 1.98 million jobs last year. Warm weather contributed to the addition of 46,000 new construction jobs versus a gain of 5,000 in December. As well, average hourly earnings have increased .4% or more 8 other time since 2001. At this point, worries over rising unit labor costs are overdone.

Confidence among US consumers remained close to a five-month high in January as job growth boosted incomes and natural gas prices plunged, helping to cushion the effects of home-heating costs, Bloomberg reported. The current conditions component of the index which gauges American’s sentiment about whether or not it’s a good time to buy big-ticket items, such as autos, rose to 110.3 from 109.1 the prior month. Retail sales climbed a very strong 5.1% in January, the Intl. Council of Shopping Centers recently reported. I continue to expect consumer sentiment to make new cycle highs later this year as the job market improves modestly from current levels, energy prices continue to fall, stock prices rise, long-term rates remain historically low, corporate spending improves and inflation decelerates.

US factory orders rose for a third consecutive month in December as demand for new autos rebounded and businesses added equipment and inventories, Bloomberg said. Orders for computers increased 4.4% after rising 11% in November. Orders for capital goods excluding aircraft, a barometer of future corporate spending, rose 4.1% versus a .1% gain in November. The inventory-to-shipments ratio fell to 1.15 months from 1.17 months in November. I continue to believe manufacturing will add to US growth over the intermediate-term on hurricane rebuilding, increased corporate spending and inventory restocking.

Growth in the US services industry eased in January as new orders slowed after a very robust showing the month before, Bloomberg said. The employment component of the index fell to 51.1 from 56.9 in December. The prices paid component of the index remained at 67.2, the same as December. The service sector should remain healthy as consumer spending stays firm, consumer sentiment rises and energy prices fall further.