NOVEMBER 4, 2024 – WEAK JOBS REPORT, PCE UP MARGINALLY
Ahead of the Federal Reserve meeting this week, the data pointed to a slowing economy. An abysmal jobs report was released Friday, showing the economy added only 12,000 jobs in October. It is not as dire as it seems; multiple mitigating factors, a strike at Boeing and two major hurricanes, were expected to have an impact. The unemployment rate held at 4.1 percent, while hourly earnings were up 0.4 percent for the month, or 4 percent annually. The weak jobs report revised down the August and September new jobs by a total of 112,000 positions. The pace of the deceleration is consistent with the Fed’s expectations to reduce fears of an inflationary rebound.
The personal consumption expenditures price index for September, the Fed’s preferred inflation gauge, was up 0.2 percent for the month, or 2.1 percent year-over-year. The data is in line with expectations as it is trending to the Fed’s 2 percent inflation target.
Expectations remain for the Fed to cut rates this week by a quarter of a percent, and to do the same in December. Though some economists believe that the Fed will pause its December rate cut, they need more proof inflation is not poised to rebound in 2024 as a result of strong consumer spending in the last quarter.