A stronger-than-expected jobs report helped drive stocks mostly higher last week and raise optimism about an interest rate cut when the Federal Reserve meets later in December. Consumer discretionary, communication services and information technology helped drive the market, which was otherwise tempered by downturns in energy, utilities, real estate, and materials. Long-term bond prices were relatively stable, with yields on 10-year Treasuries slipping 2.0 basis points from the prior week’s closing mark. Crude oil prices declined due to fears of demand despite OPEC+’s decision to extend production cuts until the end of 2026. The dollar inched higher while gold prices dipped lower.
Last Week’s Economic News
- As anticipated, the labor sector recovered from severe weather and strike activity the previous month. Employment rose by 227,000 in November.
- The manufacturing sector picked up steam in November, according to the latest survey from S&P Global.
- Business activity in the services sector increased at the fastest pace since March 2022.
- The number of job openings, at 7.7 million, increased by 372,000 in October from the prior month, according to the latest Job Openings and Labor Turnover Summary. Despite the increase, job openings were 941,000 under the pace a year earlier.
- The latest October report on the international trade deficit showed that the goods and services deficit was $73.8 billion, down by $10.0 billion, or 11.9%, in September.
- The national average retail price for regular gasoline was $3.034 per gallon on December 2.
- For the week ended November 30, there were 224,000 new claims for unemployment insurance.
Eye on the Week Ahead
November inflation data is available this week, along with the releases of both the Consumer Price Index (CPI) and the Producer Price Index (PPI). October saw the CPI rise 0.2% for the month and 2.6% for the year, while the PPI ticked up 0.2% for October and 2.2% for the year.
Have a nice week!
Sincerely,
Robert G. Carpenter