Thursday's Scoop: Spooked👻

Hey friends - Happy Halloween! Who’s got a great costume this year?

Insiders, look out for the Weekly Scoop tomorrow.

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

1. Layoffs are still low.

2. The cost of living has stopped climbing so quickly.

3. People are spending more but saving less.

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

Layoffs keep falling. The Labor Department reported that initial jobless claims fell for the third straight week last week to 216,000. Earlier in the month, claims had spiked due to Hurricanes Helene and Milton affecting the Southeast and Florida, along with a strike at Boeing that led to temporary layoffs. The number of people receiving unemployment aid for consecutive weeks also decreased last week, suggesting that people are finding new jobs more easily. A separate report from recruiting firm Challenger, Gray & Christmas showed that planned layoffs by US employers dropped nearly 24% in October. These are good signs that companies are committed to retaining their talent.

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

Americans spent more in September, boosting the economy, but the benefits aren't reaching everyone equally. The Commerce Department reported that consumer spending rose 0.5% last month, slightly more than economists expected, building on a 0.3% increase in August. Consumer spending drives most of the economy, so growth stalls if people don’t spend more each month. The uptick was fueled by a strong job market and increased household wealth from rising stock and home prices. However, much of this growth came from middle- and upper-income households. While disposable income increased in September, spending increased more, leading to lower saving rates.

The cost of living increased a little more last month. The Commerce Department reported that the Personal Consumption Expenditures (PCE) price index, which policymakers watch closely to monitor inflation, increased by 0.2% in September, bringing the annual increase in the cost of living to 2.1%. That’s very close to policymakers’ target for relatively inconspicuous annual inflation, a level not consistently seen since early 2021. Excluding more volatile food and energy costs, the core PCE price index rose by 0.3% in September, slightly higher than expected. Grocery costs jumped last month, but rent seems to be steadily climbing. Overall, while the cost of living isn’t getting any cheaper, it looks like the worst inflation is firmly behind us.

The Market:⬇️ -1.9%
S&P 500: 5,705.45
1Mo: -1% | 1Yr: +36% | 5Yr: +86%

The market sank lower on Halloween Thursday as investors were spooked by a few areas of growing uncertainty, particularly around the US election and how it affects the growing national debt. Third-quarter financial updates from America's biggest companies have gotten progressively more disappointing.