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Ambiguous Data, Market Pullback, Dropping Rates, and Moondoggie

Writer's picture: Doug MacGrayDoug MacGray

September 9, 2024


ECONOMY ADDS 142,000 JOBS IN AUGUST:  The U.S. Bureau of Labor Statistics released its report for August employment, and it shows 142,000 net new jobs in the economy. This was just a little less than had been expected. The BLS also said that their June and July reports were too high.  June was revised down from 170,000 to 118,000. July was revised down from 114,000 to 89,000. Six of the last seven jobs reports have been subsequently revised down. The unemployment rate actually improved from 4.3% to 4.2%. The manufacturing sector lost 24,000 jobs in August, the worst month for manufacturing in three years. Construction jobs had a strong month, rising 34,000. On the other hand, average wages increased 0.4%, double July's number. Average hourly earnings are up 3.8% year over year. This shows a weakening labor market, but I don't think it is weak enough for the Fed to lower interest rates more than a quarter of a percentage point at its meeting later this month.



IT WORKERS:  In the U.S., the unemployment rate for information technology workers rose to 6% in August. We were seeing layoff announcements in this industry for quite a while, and now it is showing up in the data. The unemployment rate for IT workers has now been higher than the national jobless rate for seven of the last eight months. This is the worst jobless rate for IT workers since the dot-com bubble.


ROUGH START TO SEPTEMBER:  The markets stumbled out of the gates in August, and September is starting the same way. Data out on Tuesday showed U.S. manufacturing facing continued weakness in demand in August. The ISM purchasing managers' index came in lower, and it remains in contraction. The inconclusive jobs report late in the week did not rescue the week as investors ultimately decided they didn't like it. Nvidia, which has been the big leader in this year's positive market, led markets down losing nearly 14% for the week.



LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  



EUROZONE INFLATION DROPS:  Eurozone inflation year over year dropped to 2.2% from 2.6% a month earlier. That is the lowest since July 2021. The European Central Bank lowered interest rates for the first time since 2019 last June, and another cut is expected when the ECB meets on September 12.


ANNUITY SALES RISING:  Annuity sales in the U.S. are rising at record rates. Total U.S. annuity sales rose 26% year over year in the second quarter of 2024. Annuities, especially certain types of annuities, can have a legitimate and useful place in a financial plan. But time after time, I meet with prospective clients who have annuities, and they have no idea how they work, and they don't remember whey they bought it. If you buy an annuity, please make sure you keep asking questions until you are sure of what you are buying. Make sure you know the cost, and the benefit you are getting for that cost. Make sure you know how long you are tying up your money. I have spoken with agents who sell these from time to time, and often they have a hard time explaining to me what they are selling. Again, these contracts can serve a very useful purpose, but know what you are buying before you sign anything.


RIP MOONDOGGIE:  One of the news sources I follow has a weekly roundup of famous people who have died. This week, I saw the name James Darren on the list, an actor who died at the age of 88. That is one of those names that made me think, "that sounds familiar." I looked up his image and I did recognize him. His career took off before I was born in the movie Gidget where he played "Moondoggie" next to co-stars Sandra Dee and Cliff Robertson. But he was prolific. Many of us probably remember him from T.J. Hooker, but he also had roles in Star Trek: Deep Space Nine, Diagnosis Murder, Melrose Place, Fantasy Island, The Love Boat, Hawaii Five-O, and The Time Tunnel. I think you have to be a Baby Boomer or a Gen-Xer to remember him.  


BACK IN THE GAME:  My daughter-in-law invited me to enter a 5K in her town. She ran it as well on Saturday, a perfect running morning. Below is the only picture the photographer got of me. As some of you know, I've been kind of starting over, coming out of a hip flexor injury (all better now). It has seemingly taken forever to get back down to ten-minute miles, so I was pleased to improve on that. Now my goal is to see an '8' instead of a '9' on my pace. I'll keep working.




Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545


"There is no need for me continuing unless I'm able to improve."  Knute Rockne


"That each of them may eat and drink, and find satisfaction in all their toil--that is the gift of God."  Ecclesiastes 3:13 (NIV)


SOURCES:

ECONOMY ADDS 142,000 JOBS IN AUGUST: https://www.bls.gov/news.release/empsit.nr0.htm


(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. 


SDG


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

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