The latest edition of The US Business Cycle Risk Report, published on October 8, has been sent to subscribers.
● Real Impact: The New Economics of Social Change
By Morgan Simon
Review via Publishers Weekly
Simon, the founder and chair of the nonprofit Transform Finance, begins this engaging book with a brief overview of impact investing, described as “the trillion-dollar trend most people have never heard of.” She clarifies that impact investment—as defined by the Rockefeller Foundation—focuses on generating both social benefits and profits. Simon argues that the existing “free-market-plus-charity model” has failed to enact meaningful change. A cited study reveals that just 12% of foundational donations are directed toward social justice causes; the majority support educational and arts organizations that primarily serve the affluent or economically stable.
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The US labor market experienced a notable downturn in September, with companies cutting 33,000 jobs, marking the first monthly decline in seven years, according to the Labor Department. Analysts suggest that hurricanes may have caused this temporary disruption in hiring. A review of broader macroeconomic data supports the idea that the unexpectedly weak employment figures may be a short-term anomaly linked to weather events.
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It’s an understatement to say the US stock market is performing exceptionally well. The S&P 500 Index recently achieved six consecutive daily gains, a feat not seen in over two decades, as noted by the Financial Times.
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Tropical storm Nate is approaching the central Gulf Coast: CNN
Hurricanes expected to impact the latest US payroll report: Reuters
US factory orders rose by a solid 1.2% in August: USA Today
Jobless claims in the US are declining as the impact of hurricanes lessens: Bloomberg
US job cuts decreased by 26% in September compared to a year ago: CG&S
US Consumer Comfort Index shows the largest decrease in a year: Bloomberg
US oil exports are expected to continue their boom: CNBC
The Federal Reserve’s most precise measurement of the money supply, adjusted for inflation, recorded a slight increase in August compared to the same month last year. This marks the first positive year-over-year reading since February 2016. The resurgence in annual growth for the monetary base suggests that the central bank may be preparing to ease or even reverse its recent policy tightening.
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A new tropical depression/hurricane is threatening the US Gulf Coast:
Miami Herald
Breaking down Trump’s potential candidates for the next Fed chair:
Bloomberg
Hurricanes affected US job growth in ADP’s September report:
CNBC
ISM Non-Manufacturing Index for the US reaches its highest level since 2005:
CNBC
US Services PMI for September shows solid business activity:
IHS Markit
Global economic growth is described as “broad-based and strong”:
IHS Markit
According to the latest ADP Employment Report, US companies added a modest 135,000 jobs in September, a significant drop from the previous month’s gain of 228,000. Analyzing this single data point may suggest troubling economic signals. However, the year-over-year trends remain optimistic, especially considering the temporary effects of two hurricanes likely contributed to last month’s hiring slowdown.
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Bismark Bismarck, often paraphrased, once remarked that “laws are like sausages; it is better not to see them being made.” Regardless of who originally said this, its relevance extends to predicting expected returns. While the final figures are continuously sought after, the process of deriving these numbers can become quite convoluted.
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US auto sales in September showed the highest performance of 2017:
Detroit News
Major US stock indices continue to reach record highs:
MarketWatch
Warren Buffett and BlackRock’s Larry Fink voice concerns over Trump’s tax plan:
Reuters
Spain’s Catalonia crisis deepens:
Reuters
GDPNow’s estimate for Q3 GDP growth rises to 2.7%:
Atlanta Fed
Wall Street economists anticipate Q3 GDP growth of 2.6%:
CNBC
Is the elevated CAPE ratio for US stocks a cause for concern? Possibly not:
Bloomberg
This week’s economic indicators highlight various dynamics within the US economy—from stock market successes to employment fluctuations. Observers remain cautiously optimistic as they interpret these trends in the context of recent weather events and broader economic conditions. Significantly, the interplay between short-term disruptions and long-term growth trends continues to guide investment strategies and policy discussions.
