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Week In Review


March nonfarm payrolls rose by 196,000 jobs, exceeding consensus estimates. Payrolls for the previous two months combined were revised higher by 14,000. The unemployment rate was unchanged at 3.8%. Average hourly earnings rose 0.1% and have gained 3.2% year-over-year. The labor force participation rate fell from 63.2% to 63.0%.

Our Take

A better-than-expected payroll increase was welcome news, especially after the horrible report in February, yet employment has been slowing during the first quarter. Jobs gains averaged 180,000 per month in 1Q19, down from 2018’s pace of 223,000 per month. Today’s employment report further confirms reduced economic activity in 2019.


Parliament voted Monday on a narrower set of “Plan B” options but rejected all of them. On Wednesday, Parliament approved a measure ruling out a no-deal exit by one vote. May’s government and Labour met to try to find an agreement on a softer Brexit that could command a cross-party majority. The meetings were described as “productive,” but no definitive way forward came from them yet. May wrote to the EU and requested a 30-day extension to the current deadline and asked that Britain not have to participate in the European Parliament elections at the end of May.

Our Take

Another week has passed without the British coalescing around a Brexit option that the EU will accept. Wednesday’s vote may force May to ask for extensions to avoid a no-deal exit, but eventually the EU will not grant an extension without the British committing to a tangible plan to break the deadlock.


The Italian Treasury reduced its forecast for 2019 growth to 0.1% from 1%. This lower growth rate will lead Italy to run a deficit of 2.3%-2.4% of GDP, well above the ceiling agreed with the EU last fall.

Our Take

Italy is most likely heading right back into another confrontation with the EU over its fiscal situation.

Retail Sales

February retail sales fell 0.2%, worse than expected. Sales in January were revised higher, from 0.3% to 0.7%.

Our Take

Retail sales lagged expectations, even taking January’s positive revision into account. Consumers are clearly spending less, which does not bode well for the economy.

Durable Goods

Durable goods orders fell 1.6% in February. Orders excluding transportation fell 0.1%.

Our Take

While the durable orders came in as expected, the report points to a slowdown in manufacturing activity. Add this report to the growing number showing slower growth thus far in 2019.


Municipalities are using more call features for new issue bonds since the tax exemption for advance refunding bonds was eliminated in the tax overhaul in 2017. Bloomberg reported that new issue municipal bonds that are callable in less than nine years increased from 12% in 2017 to 22% in 2018. During the first quarter of 2019, 20% had call dates in less than nine years.

Our Take

Since the tax changes occurred in 2017, removing the tax exemption for advance refunding bonds, municipalities have had to adapt. Using call features, municipalities can refinance debt should interest rates decline. Advance refunding bonds remain in the political spotlight and lawmakers continue discussions to reinstate their tax exemption.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.