The day at a glance | November 5, 2021

The Top

*Employment figures in the United States exceeded estimates (531k vs 450k e.).

*Retail sales surprised to the downside in Europe by logging a (-) 0.3% monthly contraction in September (+2.5% annual).

*The U.S. House of Representatives will vote on infrastructure package worth 1.75 trillion dollars; even though there are still differences within the Democratic Party.

*Consumer confidence in Mexico stabilized at pre-pandemic levels (43.6 Oct.); consumption of durable goods decreased.

*Transmission of the virus accelerates in Europe; Germany logged a record number of new cases for a second consecutive day.

Economic environment

The U.S. labor market strengthens. Employment data in the world`s largest economy surprised to the upside in October. 531 thousand jobs were created during the month, and the two previous months were revised upwards considerably (August +177 thousand to 483 thousand; September +118 thousand to 312 thousand total). With this, the unemployment rate once again decreased and set at 4.6%; even though the participation rate remained unchanged at 61.6%, which confirms that many people are still far from looking for a job. The creation of jobs was widespread, with the leisure and lodging sectors still leading the recovery (164 thousand), followed by transportation, professional services, storage and manufacturing. This last sector recorded its largest employment figure since June, in part because of hiring in the automotive sector. With October`s figures, the number of employees set at 4.2 million below pre-pandemic levels. Wages increased 4.9% annually in October, their highest level since last February; according to the FED, the increases remained in line with the increase in prices and productivity, which is why they raise no concern regarding inflation. Overall data paints more of a positive picture concerning the U.S. labor market, thanks to less COVID-19 infections and growing salaries, which have helped reincorporate the labor force into the market. The data backs the FED`s decision to start the withdrawal of stimuli this month, and if the labor market maintains its positive trend towards 2022, the economy will be prepared for an increase in interest rates.