Equity Markets Plunged Lower Last Week

September has clearly gotten off to a rough start for Wall Street. Stocks plunged lower on fears of an economic decline and a waning labor market, adding to investor fears that the Federal Reserve may be responding too late.  Tech stocks took a big hit, with the NASDAQ falling nearly 6.0% last week and nearly 12.0% since July 10. Consumer staples, real estate and utilities were the only market sectors to gain last week. Crude oil prices have fallen to levels not seen since 2023. Ten-year Treasuries saw their biggest weekly drop in five weeks, having fallen four straight days and seven of the last 10 days.

Unemployment Rate Fell Slightly in August

Employment increased by 142,000 in August, in line with recent average monthly job growth but below the 12-month average of 202,000. Employment growth was revised down in June and July, which rendered a combined decrease of 86,000. In August, the unemployment rate ticked down 0.1 percentage point to 4.2%, while both the labor force participation rate (62.7%) and the employment-population ratio (60.0%) were unchanged from the previous month. The total number of unemployed, at 7.1 million, was essentially unchanged from July. Long-term unemployed (+27 weeks) was little changed at 1.5 million.

Eye on the Week Ahead

The latest inflation data is out this week with the releases of the Consumer Price Index (CPI) and the Producer Price Index (PPI). The CPI increased 2.9% over the 12 months ended in June, while the PPI rose 2.2% over the same period.