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Writer's pictureDoug MacGray
Nov 34 min read

Disappointing Jobs Report, Don't Be Anxious

November 3, 2024


LESS NEW JOBS:   According to the U.S. Bureau of Labor Statistics, the U.S. economy added 12,000 jobs in October. Bank of America and Goldman Sachs both predicted 100,000 or more new jobs for the month. The August number, which had been reported as 159,000, was revised down by 81,000 to 78,000. The September number was revised down by 31,000 to 223,000. August and September had 112,000 fewer jobs than first reported. In October, public (government) payrolls increased by 40,000, and jobs in the private sector decreased by 28,000. That is the first month of negative jobs in the private sector since 2020. The unemployment rate held steady at 4.1%. Some of these disappointing numbers may have been caused by the Boeing strike and the hurricanes. The markets shrugged off the news.



POSITIVE FINISH TO ANOTHER NEGATIVE WEEK:  Two tech power houses, Intel and Amazon, led a positive Friday to help stem some of the losses earlier in the week. Earlier, two other tech giants, Meta (Facebook) and Microsoft helped pull the NASDAQ Composite to its worst day in two months. We are now seeing volatility aided by so many investors putting so much into one sector, the large tech sector.  For the week, the Russell 2000 (small U.S. companies), was positive. Investors appear to believe that the Fed is going to lower rates by another quarter of a percentage point this coming week. If it does something different, it will move the markets.



LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  



THE PCE INDEX:  The Fed's preferred inflation index is the Personal Consumption Expenditures (PCE) index. The September PCE just came in at an annual rate of 2.1%, down from 2.3% in August. The Fed likes to exclude food and energy, and the PCE minus those two factors was up 2.7%, exactly what it was the month before.


SO THE BRICS MET:  I hear a lot of concern that the BRICS countries are going to get together and do harm to the global economic order. BRICS stands for Brazil, Russia, India, China and South Africa. Other countries have expressed interest in being added to the BRICS group (e.g., Cuba and Venezuela), but what is the group accomplishing? The latest BRICS summit was over a week ago at Kazan on the Volga River in Russia. (The President of Brazil didn't even show up.) The end result was the Kazan Declaration. That declaration stated that BRICS cannot become a global integration project. It will not likely contribute to solving disputes between members. It can, said the declaration, promote trade and investments among members. Putin declared prior to the summit that a common BRICS currency is not being considered. They do want to explore an independent blockchain-based depository system and a cashless payment service to protect against the West weaponizing existing platforms against them (as the West has done against Russia since the outbreak of the Ukraine war). The experience of the BRICS summits proves that it is a lot easier to talk about creating truly alternative institutions than actually doing so.


THE CHINA STIMULUS:  China has unleashed extensive stimulus. It has cut interest rates, lowered the reserve requirements for banks, and provided support for the real estate sector. The People's Bank of China has lowered its mortgage rates while also freeing up more capital for banks to lend. Between government subsidies and direct payments to households the stimulus is expected to cost at least $420 billion. Will it help? Borrowing costs were already low, so this may not be enough to jolt businesses and consumers into borrowing money for spending. Consumer confidence is near record lows. The property crunch since 2021 has wiped out about $18 trillion in household wealth (about $60,000 per family on average). 


A BOOK RECOMMENDATION: I recently had a book recommended to me. I had to fly last weekend, and I read this book during those flights. Now I am going to recommend it, very, very highly to you. We have all seen the statistics showing that mental health metrics all took a huge jump in the wrong direction right around 2015. After you read this book, you will no longer wonder why, and you will likely change some behaviors, especially as it relates to how you raise and interact with your children or grandchildren or students. This is one of those books that I believe will improve society if enough people read it, the insights are that helpful.



A GREAT WAY TO BE A TOURIST: In the past several years, I have been fortunate to travel to a variety of places for pleasure and mission, with family and friends. Generally, when traveling, I try to get up before everyone else and go for a run. In addition to good exercise, it is a great way to see things you would not otherwise see as a tourist. I use a Garmin watch. This morning I was browsing through the maps of some of my runs in the past year. They all bring back specific memories of each place.



Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545


"When we socialize, when we cultivate purpose in later life, we live longer.  There is not one biohacking activity that has proven to have as much of an effect on longevity as when you shift your mindset from a negative one to a positive one -- you gain 7.5 years of additional life." Chip Conley, author of Learning to Love Midlife: 12 Reasons Why Life Gets Better With Age


"Do not be anxious about anything." Philippians 4: 6


SOURCES:


(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. 


SDG


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.

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