I'm happy to report that our power is back. Electricity was restored to my neighborhood on Saturday afternoon. We were in the dark for a full five days. I don't want to sound too gleeful because there are still many people less than a mile from us who remain without power. And one of my cousins in Long Island was told that it could be two weeks or longer before the power is restored in her area. The past week has given me a new found appreciation for the flashlight. When you don't have electricity, you begin to think that the flashlight is man's greatest technological innovation.
Now that the crisis is over for my family, I can focus once again on economic issues. For the most part, the economic data that came out last week was better than expected. The gain in nonfarm payrolls for the month of October was 171,000, well above the 125,000 expectation. More importantly, the August and July estimates were revised upward. In addition, initial jobless claims of 363,000 beat the consensus estimate. Another encouraging sign was the ISM Index of 51.7, which points to expansion in the manufacturing sector (albeit at very weak levels).
While the latest economic figures bode well for President Obama's reelection efforts, the stock market shrugged it all off. Gold also sold off, dipping well below $1,700 per ounce. The election, of course, is on everyone's mind. It's not yet clear how the aftermath of Hurricane Sandy will affect the voting. Real Clear Politics, which aggregates results from the major polls, is currently showing Obama and Romney in a statistical dead heat. Obama looks much stronger on electoral votes.
The winner will have to contend with a looming crisis: the fiscal cliff. It remains to be seen if politicians can put aside their differences before the January 1 deadline. Economic indicators may be improving on the margin, yet the markets don't seem to be going along. Another positive economic number I should mention is China's better-than-expected purchasing managers' index. With a crisis in Europe and a looming crisis in the United States, investors are hoping China can pull the world out of its doldrums. Because China is so important, I thought I'd give a shout out to Lynn Harrison. Lynn was a guest on this MoneyMasters video shot in 2007! His comments about China are just as relevant today. Lynn and his wife were kind enough to give my family shelter on Friday night when we were still without power or heat.