18 Sep August Economy Update 2019
August has been a turbulent month for the market, many ups, and many downs. Coming into the back end of September we are starting to see the numbers from last month come in. Brexit has continued to make the EU unsteady and a strike from United Auto Workers has added to the already volatile global market, especially with the ongoing U.S. China trade war. As we approach the end of the third quarter of 2019, it is even harder than ever to be able to tell what is going to come of the next few months ahead of us
The main indices may be up on the year, but they have been hit hard in recent weeks. The Dow ended down -1.72% and up +13.19% YTD. The S&P; down -1.81% and up +16.74%, the NASDAQ; down -2.60% but up a considerable +20.01% on the YTD, and the Russell 2000 taking the hardest hit finishing down -5.07% and up +7.91% on the YTD. Being that the Russell 2000 is the lower 2/3 of the Russell 3000, which measures just about 98% of the investable U.S. stock market, this shows the slowdown in the U.S. economy as a whole.
In the fixed income sector the market we are seeing a continuing downward trend. 10-year treasury yields fell from 2.02% at the end of July to 1.50% at the end of August. This represents a loss of -52 basis points with a total loss of -118 on the YTD.
Overall, inflation remains flat, sitting at 1.4% since last August, which is well below the FEDs annual target ceiling. There are also about half as many people who believe that the FED will cut rates a second time since last month.
The Labor market, however, has been a strong and consistent part of our economy so far. Consumer prices have gone up 2.2% while consumer spending has increased by double at 4.7%. Employment increased by 164,000 in July after 193,000 new jobs were added to the market in June. With the national average wage up 3.2% to $27.98, this is a good sign for our economy indeed.
As we approach the end of the third quarter, most investors are looking toward the trade dispute to see where they will be placing their bets. Make sure you stay informed as these situations continue to develop.