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From the Desk - Economic Commentary

Scott Hofer, Member Strategies Director - 10/2/2023

U.S. stocks started lower this morning after Congress agreed to a short-term plan to push an agreement on government spending out to November. In economic news, the S&P U.S. manufacturing PMI improved in September by 1.9 points to 49.8, beating expectations and moving closer to expansion territory. The rise was due to output moving into growth territory; however, input prices and output charges increased at a quicker rate. The ISM manufacturing PMI also came in higher than expected increasing 1.4 points to 49.0 in September. New orders and backlogs contracted, employment and production expanded, and prices decreased.

Construction spending was inline with expectations increasing 0.5% in August, a deceleration from the prior month’s 0.9% growth. Spending was up 7.4% year over year. Private construction increased 0.5% for the month with residential and nonresidential construction up 0.6% and 0.3%, respectively. Public construction was up 0.6%.

U.S. Treasury yields are higher this morning, with the 2-year Treasury yield up 7.5 basis points to 5.10%, the 5-year Treasury yield up 11.0 basis points to 4.67% and the 10-year Treasury yield up 10.9 basis points to 4.63%. Advance rates are lower inside of one year, higher on terms greater.

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