Thursday's Scoop: Drifting☀️

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Insiders, look out for the Weekly Scoop tomorrow.

Here’s what you need to know today to inform your work, spending, and investments:

1. Spending picked up in September.

2. Fewer people got laid off last week.

3. Global policymakers think inflation is under control.

Unemployment Rate: 4.1%
^{Relatively low, but up from record lows.}

Fewer Americans were laid off last week, but the job market's still a bit uncertain. The Labor Department reported that initial jobless claims fell by 19,000 to 241,000, surprising economists who expected them to rise to 260,000. This drop to a more normal level follows a spike caused by Hurricane Helene. With the effects of both Hurricane Helene and Milton still playing out, job numbers could be a mess for a couple of weeks. A big strike at Boeing involving 33,000 workers and recent job cuts might shake things up further. So, while it's good news that fewer people are seeking unemployment aid, ongoing storms and industry changes might make job security feel a bit shaky for now.

Inflation Rate: +2.4% (YoY), +0.2% (MoM)
^{Policymakers aim for 2% YoY inflation. (September CPI)}

Americans kept spending more in September, giving the economy a solid boost. The Commerce Department reported that retail sales rose 0.4% last month, slightly higher than economists expected, building on August's gains. With gas prices dropping, people had extra cash to spend at restaurants, bars, and clothing stores—maybe you've noticed busier shops and eateries yourself. This strong spending suggests the economy grew at a healthy pace over the summer, which is good news for job security and economic growth. With wages catching up on the cost of living this year, consumers feel confident enough to keep shopping despite some uncertainties.

Global policymakers think inflation is under control and have started reducing borrowing costs. The European Central Bank (ECB) just lowered its baseline interest rate by a quarter-point to 3.25%, marking its third cut this year and the first back-to-back cuts in 13 years. The US central bank started reducing rates last month, and the Bank of England has begun cutting this year, too. Policymakers worldwide raised interest rates dramatically to fight sky-high inflation by slowing borrowing and spending. Even though things aren’t getting cheaper, the inflation in the cost of living has slowed back to a more normal pace, allowing central banks to loosen up their restrictive policies. With European inflation dropping to an annual pace of 1.7% last month—below the ECB’s 2% target—they're shifting focus from fighting inflation to supporting growth, which has been sluggish for nearly two years. High interest rates have been hurting investment and spending worldwide, so these moves aim to give the global economy a little boost.

The Market:⬇️ -0.02%
S&P 500: 5,841.47
1Mo: +4% | 1Yr: +34% | 5Yr: +96%

The market wavered lower on Thursday as investors digested mixed messages that largely maintained the narrative that the economy is doing pretty well. Positive messages from computer chipmaking giant TSMC balanced out negative warnings from fellow giant ASML earlier in the week. Banks are optimistic. Hiring is slow but steady.