Week of September 30 - October 4, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

October 9, 2019

Weekly Economic Review

Weekly Macro Updates

Unemployment Rate (Sep) 3.7% est., 3.5% actual, 3.7% prior
Underemployment Rate (Sep) 6.9% actual, 7.2% prior
Labor Force Participation Rate (Sep) 63.2% est., 63.2% actual, 63.2% prior
Avg Hourly Earnings YoY (Sep) 3.2% est., 2.9% actual, 3.2% prior
ADP Employment Change (Sep) 140k est., 135k actual, 157k prior: R-
Change in Nonfarm Payrolls (Sep) 145k est., 136k actual, 168k prior: R+
Change in Manufact. Payrolls (Sep) 3k est., -2k actual, 2K prior: R-
Initial Jobless Claims (Sep 28) 215k est., 219K actual, 215k prior: R+
Continuing Claims (Sep 21) 1654k est., 1651K actual, 1656k prior: R+
ISM Manufacturing (Sep) 50.0 est., 47.8 actual, 49.1 prior
ISM Non-Manufacturing Index (Sep) 55.0 est., 52.6 actual, 56.4 prior
Factory Orders (Aug) -0.2% est., -0.1% actual, 1.4% prior
Durable Goods Orders (Aug F) 0.2% actual, 0.2% prior
Cap. Good Orders Nondef ex Air (Aug F) -0.4% actual, -0.2% prior

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.

Capital Market Implications

The employment picture was a focus of last week’s releases with the unemployment rate falling to its lowest level in 50 years as job growth remained steady.  The manufacturing sector, which is often more tied to global trade, lost jobs (not including the effect of the United Auto Workers strike).  Manufacturing releases continued to soften as the World Trade Organization forecast that global trade will be down significantly; services numbers were also disappointing. 

Stocks were down for a third straight week as trade issues and global softening weighed on investors.  The S&P 500 index was down -0.3% while the Dow lost -0.9%.  Small caps continued to be the larger underperformer, with the Russell 2000 index losing -1.3%.  Reversing last week’s trend, growth outperformed value, gaining 0.6% versus a loss of -1.1%.  International markets were also down, with developed markets losing -2.2% while emerging markets were down -0.5%.  Bonds were positive for the week, with the aggregate index gaining 0.8%.  Corporates were the best performer, returning 0.9%, while municipal bonds were up 0.6%.  High yield bonds also saw a downward trajectory, losing -0.5%, in line with losses suffered by stocks.