The main event of the week was the August jobs report issued on Friday. It was a surprising figure that has caused some friction between the president and the Fed as to what it should mean for monetary policy. Of course, there were some other important news releases this week as well as other events that shaped the markets over the last five trading days.
On Tuesday, the ISM Manufacturing PMI came out and was a bit lower than expectations. It came in at 54.6 compared to an expected 55.2 prior to the release and 55.6 last month. However, despite the miss, the manufacturing sector is still considered to be in an uptrend, which is likely positive for the economy.
Later Tuesday, the JOLTS report came out and revealed that there were 7.27 million job openings in the United States as of August. This compares to an estimated 7.33 million positions prior to the release and 7.18 million openings in July.
On Wednesday, the ADP nonfarm payroll report came out, and it showed that the economy added 38,000 jobs compared to an expected 46,000 jobs in August. Regardless, it was expected that the result would show muted growth over that time period. The real surprise came on Friday when the Bureau of Labor Statistics (BLS) released their version of the report.
Friday morning, the BLS indicated that 162,000 jobs were created in August. This was well over the projected 55,000 prior to the release, and it’s worth noting that July’s figure was revised upward to a gain of 21,000 jobs. The unemployment rate remained steady at 4.1 percent while average hourly earnings were up 0.3 percent for the month.
President Trump claimed that the overall health of the economy shows that there should be rate cuts in the future. However, members of the Fed claim that the renewed pace of hiring shows that there is a case for rate hikes moving forward. As of now, it’s still probable that rates will stay unchanged after the September Fed meeting. That likely depends on inflation data expected out this week.
Unemployment claims data was released Thursday morning in-between the two nonfarm payroll reports. It found that there were 206,000 requests for benefits over the last seven days, which was almost exactly what analysts expected prior to the release and was little changed from last week.
The ISM Services PMI was also released Thursday and came in at 55.4. This was slightly higher than the prediction of 54.2 prior to the information going public and was also higher than the 54.1 reading for July.
The S&P 500 was up 0.53 percent this week to finish Friday’s trading at 7,718. This was a gain of 40 points for the index that is up almost 2 percent over the last four weeks and up 18.71 percent over the last year. Over the past five days, the index made a low of 7,614 on Tuesday and a high of 7,754 on Thursday.
Like the S&P, the Dow was up 0.33 percent this week to finish at 53,414 at the end of the day on Friday. This represented a gain of 174 points over the last five trading days. Over the last four weeks, the index is up 0.5 percent and is up almost 18 percent over the last 12 months. For the week, the Dow made a low of 52,733 on Tuesday and a high of 53,743 on Thursday.
Finally, the Nasdaq was up 0.82 percent to finish the week at 26,509. This was a gain of 216 points over the last five trading days. Over the last month, the index is up 2.88 percent and is up 22 percent over the last 12 months. This week, the index made a low of 26,045 on Tuesday and a high of 26,643 on Thursday.
The upcoming week will be another consequential one for market participants. On Thursday, PPI for August will be released while CPI data for August will be released on Friday. Overall CPI is expected to have increased 0.4 percent for the month, which implies that it increased 3.4 percent on an annualized basis.