Weekly Market Snapshot

The ISM surveys for August were mixed and the employment report disappointed, but investors were encouraged by prospects for U.S./China trade talks, which are set to resume at a high level in early October.

The ISM manufacturing index was weaker than expected in August, with the headline composite, new orders, production, and employment each falling below the breakeven level (although it had already been clear from the Federal Reserve’s industrial production data that factory output has been declining since December). The ISM’s non-manufacturing survey results were stronger than expected, consistent with moderate growth in the overall economy.

Nonfarm payrolls rose by 130,000 in the initial estimate for August, despite a 25,000 boost from hiring for the 2020 census. Private-sector payrolls rose by 96,000, with a net 35,000 downward revision to June and July, leaving the three-month average at +129,000 (significantly slower than last year, but still beyond a pace needed to absorb new entrants into the workforce). Average hourly earnings rose 0.4% (+3.2% y/y), up 0.5% (+3.5% y/y) for production workers. The unemployment rate held steady at 3.7%, as labor force participation increased.

Next week, the key data arrive toward the end of the week. The Consumer Price Index should reflect a dip in gasoline prices, with moderate core inflation. Following three strong months, retail sales growth is likely to be more moderate in August (unit motor vehicle sales were little changed and gasoline sales should edge lower).


  Last Last Week YTD return %
DJIA 26728.15 26362.25 14.58%
NASDAQ 8116.83 7973.40 22.33%
S&P 500 2976.00 2924.58 18.71%
MSCI EAFE 1873.80 1831.36 8.95%
Russell 2000 1510.75 1496.72 12.03%