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Market Commentary: Unemployment Falls to 4.8%; U.S. Trade Deficit Hits Record

Market Commentary

Market Commentary: Unemployment Falls to 4.8%; U.S. Trade Deficit Hits Record

For the second consecutive month, the U.S. job market created far fewer jobs than expected. September’s report showed only 194,000 jobs were created, missing expectations by nearly 300,000. A deeper look at the data shows the report wasn’t as bad as indicated by the overall number.

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Market Commentary: Equity Markets Have Worst Month of Year; Virus Variants, China Among Key Risks

Market Commentary

Market Commentary: Equity Markets Have Worst Month of Year; Virus Variants, China Among Key Risks

Equity markets struggled in September as interest rates, inflation concerns, and developments in China all weighed on stock market averages. The S&P 500 surrendered 4.7% as large-cap growth companies led the market lower. Large-cap growth has been the top performing style box since the beginning of the second quarter.

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Market Commentary: Fed Leaves Rates Unchanged, Could Begin Tapering of Asset Purchases this Year

Market Commentary

Market Commentary: Fed Leaves Rates Unchanged, Could Begin Tapering of Asset Purchases this Year

The Federal Reserve met last week, and Chair Jay Powell indicated tapering this year is more likely than not. The decision on when to reduce the central bank’s purchases of government-backed bonds will likely be affected by the employment report released a week from Friday. If labor market strength resumes, the Fed appears likely to roll back its support.

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Market Commentary: Consumer Demand Stays Strong, Continuing Trend Toward Lower Inflation

Market Commentary

Market Commentary: Consumer Demand Stays Strong, Continuing Trend Toward Lower Inflation

 Two U.S. economic reports provided reassuring news about the economy. The inflation trend moderated in August. Consumer price inflation (CPI) rose 0.3%, down from 0.5% the previous month and below estimates of a 0.4% increase (Figure 1). Excluding food and energy, prices increased just 0.1%.

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Market Commentary: Amid High Worker Demand, Job Openings Rise to 10.9 Million

Market Commentary

Market Commentary: Amid High Worker Demand, Job Openings Rise to 10.9 Million

July job openings increased to 10.9 million, up 779,000 from June. The record number suggests weaker August job growth was partly related to a low supply of workers and demand for workers remains robust.

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Market Commentary: U.S. Job Creation Slows, Emergency Unemployment Benefits Expire For 7.5 Million People

Market Commentary

Market Commentary: U.S. Job Creation Slows, Emergency Unemployment Benefits Expire For 7.5 Million People

 The U.S. economy produced just 235,000 new jobs in August, missing expectations of 725,000. Unemployment dipped to 5.2%. Average hourly earnings rose 0.6%, partly because wages continue to rise more rapidly compared to the pre-pandemic pace.

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Market Commentary: Fed Chair Signals Reduction in Bond-Buying Program; S&P 500 Reaches Another All-Time High

Market Commentary

Market Commentary: Fed Chair Signals Reduction in Bond-Buying Program; S&P 500 Reaches Another All-Time High

 Federal Reserve Chair Jerome Powell joined the chorus of Fed officials signaling the U.S. central bank would reduce its bond-buying program designed to keep long-term interest rates low and sustain the economy during the pandemic. After two strong jobs reports and generally positive economic news, Fed officials seem ready to reduce bond purchases later this year.

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Market Commentary: S&P 500 Doubles From Its Pandemic Low; U.S. Retail Sales Decline

Market Commentary

Market Commentary: S&P 500 Doubles From Its Pandemic Low; U.S. Retail Sales Decline

The benefits provided by recent stimulus packages seem to be fading. U.S. retail sales dipped 1.1% last month and have now declined in two of the last three months [Figure 1]. Declines in motor vehicle and online purchases led the fall. Restaurant sales grew 1.7% in July and continue to rebound. Federal Reserve minutes indicated the economy looks strong enough for the central bank to taper bond purchases in coming months.

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Market Commentary: Inflation Surge Loses Steam, Job Openings Continue to Increase

Market Commentary

Market Commentary: Inflation Surge Loses Steam, Job Openings Continue to Increase

Core inflation moderated significantly last month, rising only 0.3% after jumping 0.9% in June. Used vehicle prices, which rose 10.2% in June, increased only 0.2% in July. Core CPI excludes food and energy prices, which rose 0.7% and 1.5% respectively. Those two categories propelled overall inflation 0.5% higher, down from 0.9% last month.

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Market Commentary: Restaurants, Bars Lead Hiring Surge as Unemployment Drops, Wages Rise

Market Commentary

Market Commentary: Restaurants, Bars Lead Hiring Surge as Unemployment Drops, Wages Rise

 A strong U.S. employment report was the top market event last week. Payrolls surged 943,000, and the prior two months were revised higher by 119,000 (Figure 1). Restaurants and bars continue to rehire workers as activity expands. The leisure and hospitality segment, which includes eating establishments, added 380,000 jobs.

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