The stock market was heavily influenced last week by new labor market data, which continued to show signs of cooling and bolstered expectations of a Federal Reserve interest rate cut later this month. Markets began the week weaker but ended strong, with the S&P 500 and Nasdaq closing at record highs on Friday, powered by big tech. Treasury yields fell sharply, reaching their lowest level in five months, while gold advanced and oil prices slid.
Last Week’s Economic News
- Job growth slowed again in August, with the unemployment rate ticking up to 4.3%, and long-term unemployment rising to 1.9 million.
- Average hourly earnings rose 0.3% in August and 3.7% over the past year; the average workweek held at 34.2 hours.
- Job openings fell slightly from June to July, while hires edged up slightly and separations dipped.
- The services sector expanded in August, supported by stronger new business, though confidence dropped to a four-month low due to tariff concerns.
- Manufacturing activity posted its strongest improvement since May 2022.
- The July trade deficit widened as imports surged while exports rose just slightly.
- Gasoline prices rose to a national average of $3.177 per gallon on September 1, lower than a year ago.
- For the week ended August 30, initial jobless claims rose to 237,000. Continuing claims dipped slightly to 1.94 million.
Eye on the Week Ahead
This week brings key inflation updates, including the August Consumer Price Index and Producer Price Index. July’s PPI showed a sharp 0.9% monthly increase and a 3.3% annual rise, so investors will be watching closely for signs of sustained price pressures.
Have a nice week!
Sincerely,
Robert G. Carpenter