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Weekly Economic Update, September 5th

on Sep 6, 2016 in Announcements: Financial Planning, General Parrott Insurance News

MODEST JOB GROWTH IN AUGUST
Payrolls expanded with 151,000 net new jobs last month, according to the Department of Labor’s latest report. The jobless rate was unchanged at 4.9%, and the U-6 rate tracking underemployment remained at 9.7%. After the release of the data, Wall Street traders saw only a 21% chance of a September interest rate hike by the Federal Reserve and a 55% chance of a rate increase by the end of 2016.1

FACTORY SECTOR CONTRACTS
Taking a surprisingly steep drop, the Institute for Supply Management’s manufacturing purchasing manager index fell down to 49.4 in August, indicating a slowdown in U.S. factory activity. In July, the PMI had a reading of 52.6.2

SOLID CONSUMER CONFIDENCE, SPENDING NUMBERS
The Bureau of Economic Analysis noted a 0.3% rise in personal spending and a 0.4% gain for personal income in July. The Conference Board’s consumer confidence index rose 4.4 points in August to an impressive 101.1 mark.2

PENDING HOME SALES IMPROVE
Housing contract activity increased 1.3% in July, according to the National Association of Realtors, more than offsetting the 0.8% June fall. The May edition of the 20-city S&P/Case-Shiller home price index showed a 5.1% year-over-year gain in home values.2

S&P 500 LOGS WEEKLY GAIN
Across five trading days, the broad benchmark rose 0.50% to 2,179.98. The Nasdaq and Dow posted similar gains in the same interval – the Nasdaq rose 0.59% to 5,249.90; the Dow, 0.52% to 18,491.96. The CBOE VIX – the “fear index” measuring market volatility – closed at just 11.97 Friday, down 12.31% for the week.3

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