Rover's Weekly Market Brief - 09/01/2023

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Economy

The U.S Bureau of Labor Statistics Job Openings and Labor Turnover Survey, or JOLTS reported 8.827 million job openings as of the last day of July, 338,000 lower than June’s 9.165 million reading. The job openings rate fell to 5.3% from 5.5% in June. July’s reading was the lowest since March 2021. Industries contributing to the decrease included professional and business services (-198,000); health care and social assistance (-130,000); state and local government, excluding education (-67,000); state and local government education (-62,000); and federal government (-27,000). Job openings increased in information (+101,000) and in transportation, warehousing, and utilities (+75,000). The number of people who voluntarily left their jobs decreased (-253,000) to 3.549 million. The number of people who quit their jobs for other opportunities made up 2.3% of the workforce in July, little changed from the previous month. Quits decreased in accommodation and food services (-166,000); wholesale trade (-27,000); and arts, entertainment, and recreation (-17,000). The number of hires decreased slightly (-167,000) to 5.773 million in July. The hiring rate decreased by 0.1% to 3.7%. There were 1.5 available jobs for each unemployed person in July, down from 1.6 in June.

The Bureau of Economic Analysis’ second estimate on second-quarter gross domestic product (GDP) growth reported an economy expanding at a seasonally adjusted annual growth rate of 2.1% down from the first estimate of 2.4%, but slight above the 2.0% pace set in the first quarter. Private inventories were revised down, showing a decline at a (-$1.8B) pace instead of increasing at the previously reported (+$9.3B) pace. Inventories were a negative to GDP growth instead of adding 0.14 percentage points per the first estimate. There were also downward revisions to business spending on equipment (from +10.8% to +7.7%) and intellectual products (from +3.9% to +2.2%). Consumer spending which accounts for over two-thirds of the U.S. economy was revised up slightly (from +1.6% to +1.7%), but it is still down significantly from the (+4.2%) for Q1 of 2023. The PCE price index, which is one of the main measures of inflation and consumer spending, increased at a (+2.5%) annual rate, down from the (+4.1%) pace in the first quarter.

The Bureau of Economic Analysis reported the Personal Consumption Expenditures (PCE) price index increased 3.3% from July 2022, as compared to readings of (+3.0%), (+3.8%), (+4.3%) and (+4.3%) over the previous months. Although above the 3.0% pace set the previous month, it is well below the 40-year high of 6.98% set in June 2022. The PCE is watched closely by the Fed as it portends future inflation. On a monthly basis, the headline number showed a (+0.2%) increase, as compared to (+0.2%), (+0.1%), (+0.3%), and (+0.1%) over the previous months. Consumer spending increased (+0.8%) in July as personal consumption expenditures increased $144.6B. The $144.6B increase reflected increases of $102.7B in spending for services and $41.9B in spending for goods. The PCE price index increased (+0.2%) in July, as prices for goods decreased (-0.3%) and prices for services increased (+0.4%). Food prices increased (+0.2%) and energy prices increased (+0.1%). The closely watched core PCE index, which strips out the more volatile factors of food and energy continued on a somewhat level trajectory with a year over year (+4.2%) increase, this follows readings of (+4.1%), (+4.5%), (+4.6%), and (+4.6%) over the previous months.

Upcoming Economic Reports:

Tuesday September 5 – Factory Orders (MoM) (July)

Wednesday September 6 – Services PMI (August)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
United Corp (UNC.TO)	HealthEquity (HQY)	American Eagle Outfitters (AEO)	DocuSign (DOCU)	Hooker Furnishings (HOFT)
BYD (BYDDF)	Zscaler (ZS)	C3.ai (AI)	Toro (TTC)	Kroger (KR)