Commodities rose broadly despite challenging economic data.

It was a strong week for commodities. With the exception of natural gas, prices rallied across the board. Even stocks, which saw intense volatility early in the week, managed to finish the period up, by less than half a percent. The S&P 500 cut its year-to-date loss down to 3.2 percent from as much as 6 percent on Monday.

Macroeconomic Highlights

A pair of rather disappointing economic reports were released this week, but bullish traders hoped they were a reflection of the severe weather affecting the U.S. and not broader problems with the economy. 

On Monday, ISM reported that its manufacturing PMI for the U.S. plunged from 56.5 to 51.3 in January, the lowest level since May. On the other hand, ISM said that its nonmanufacturing index ticked up from 53 to 54 to January, better than the expected 53.7 reading.

Meanwhile, the Bureau of Labor Statistics reported that employers added 113K jobs in January, well below the 180K increase that was expected. At the same time, December’s job gain was left essentially unchanged at 75K.

On the positive side, the BLS said that the unemployment rate ticked down from 6.7 percent to 6.6 percent, the lowest rate since October 2008. The fall in the unemployment rate came despite an increase in the labor force, which edged up from 62.8 percent to 63 percent.

Importantly, the nonfarm payrolls figure and the unemployment rate are derived from separate surveys, which may help explain the mixed message from these reports.

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