Thursday's Scoop: Holding☀️

Hey friends - almost Friday!

Insiders, look out for the Weekly Scoop tomorrow.

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

1. Employers are still hanging onto their workers.

2. The economy showed signs of a rebound in September.

3. Businesses have grown cautious with their spending.

Unemployment Rate: 4.2%
^{Relatively low, but up from record lows.}

Employers are still hanging onto their workers. The Labor Department reported that initial claims for unemployment benefits rose to 225,000 last week, still a relatively low level of layoffs. Continuing claims from those who requested unemployment benefits for consecutive weeks dipped slightly, reflecting some improvement in the ease of finding a job. However, many disruptions will affect hiring in the weeks ahead, from Hurricane Helene’s devastation to the historic strikes at Boeing and major US ports. While the strikes may not directly impact unemployment claims, they could ripple through supply chains, causing temporary layoffs in related industries. Policymakers are watching the jobs market closely for signs of trouble.

The economy is showing signs of a rebound. In September, the Institute for Supply Management (ISM) reported that business activity in the services sector jumped to the highest in 18 months thanks to increased business and consumer spending. Services drive most of the US economy, so this growth is a positive sign. However, ISM reported a dip in hiring across the sector. On the flip side, manufacturing remains in a slump, with contracting business activity for 22 of the past 23 months. While new orders and production showed slight improvement, employment in factories dropped further, and companies were cutting jobs. Lower costs for materials and falling interest rates could help manufacturing bounce back, but for now, the services sector is carrying the economy.

Businesses have grown cautious with their spending. Factory orders in the US took an unexpected dip in August. According to the Commerce Department, orders for manufactured goods fell by 0.2%, following a strong 4.9% increase in July. Economists had predicted no change, making this decline surprising. Business investment also showed signs of cooling, with shipments of core capital goods—excluding defense and aircraft—falling by 1.8%. This suggests that companies may be pulling back on equipment spending after robust growth earlier in the year.

The Market:⬇️ -0.2%
S&P 500: 5,699.94
1Mo: +3% | 1Yr: +35% | 5Yr: +93%

The market wavered lower on Thursday as investors waited to see how the tensions in the Middle East would evolve. It's unclear whether Israel will launch an attack on Iran that escalates the situation. Within the US, more data points to a solid economy.