Hawkish. Dovish. Does It Matter?

Today’s first economic release is out. The ADP private payroll estimate came out at 153,000. This is only slightly lower than expected and won’t change expectations about Friday’s nonfarm payroll report. Weekly jobless claims fell sharply to a new low of 235,000, but take this with a grain of salt given the holidays. The non-manufacturing ISM index will be out later this morning.

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Yesterday’s FOMC minutes were standard issue. The Federal Open Market Committee talked of a solid jobs market and raised inflation expectations, but it also talked extensively about risks, mostly the dollar and global concerns. Some analysts thoughtthe minutes were hawkish in tone, whereas bond traders thought the risk section made the minutes dovish. My opinion is that minutes are irrelevant.

Also from yesterday, December auto sales beat expectations just enough to record a new all-time-record year for sales. The December rate was 18.4 million units annualized versus expectations of 17.7 million. This brings total sales for 2016 to 17.55 millionversus the 2015 record of 17.46 million. This isn’t a big jump, but a new record is a new record and this is good news for credit unions.

Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.