The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
Strong services growth and low layoffs showed the economy still expanding, but rising prices, higher mortgage rates and hawkish Fed minutes kept pressure on markets. The latest data shifted attention from recession fears to how long restrictive policy can stay in place.
US consumer confidence slipped in early October, with Michigan sentiment falling to 46.3 and current conditions weakening sharply. The report also showed one-year inflation expectations rising to 4.7%, adding pressure on households already facing elevated mortgage and credit costs.
U.S. mortgage rates are climbing fast, with the 30-year fixed average reaching 7.40% and applications falling for a fifth straight week. The move is cooling housing demand, squeezing affordability, and reinforcing expectations that the Fed will stay on hold.
US initial jobless claims dipped to 197,000, beating forecasts and staying near multi-decade lows. But continuing claims climbed, underscoring a low-hire, low-fire labor market where layoffs remain scarce even as job seekers face a tougher search and the Fed keeps policy restrictive.
A packed October calendar puts the ISM Services PMI, Fed speeches, FOMC minutes, mortgage rates, and jobless claims in focus. Traders will watch for signs that strong service demand can coexist with cooling hiring, sticky inflation, and rising policy uncertainty.
A weaker September payrolls report cooled expectations for another Fed hike, but stronger manufacturing, firm jobless claims and a jump in ISM prices kept inflation worries alive. Markets swung between soft-landing optimism and higher-rate caution as Treasury yields reversed and stocks tried to digest mixed economic signals.
US factory orders rose just 0.1% in August, but the details showed a slower-moving industrial economy rather than a stall. Core business equipment demand held up, while aircraft orders fell sharply, reinforcing a mixed manufacturing outlook and little urgency for a Fed rate hike.
September payrolls rose just 29,000, far below forecasts, while unemployment edged up to 4.2%. Traders quickly cut odds of another Fed hike, lifting stocks and pushing Treasury yields lower as markets read the report as cooling labor demand rather than a collapse.
US mortgage rates surged again, with the 30-year fixed average climbing to 7.28% and hitting its highest level since late 2023. The move is squeezing affordability, cooling buyer demand, and reinforcing a higher-for-longer housing market backdrop.
U.S. manufacturing stayed in expansion, with new orders and employment improving, but the Prices Paid Index jumped sharply, signaling fresh inflation pressure. The report points to resilient factory demand, higher input costs, and a tougher path for the Federal Reserve on rate cuts.
U.S. jobless claims slipped below forecasts, with initial and continuing claims both declining. The data point to a labor market that is cooling without cracking, easing recession fears but giving the Federal Reserve less reason to move quickly toward rate cuts.
The MBA’s 30-year mortgage rate climbed to 7.30%, the highest in the current data set and a fresh blow to affordability. Applications fell again as Treasury yields surged, pushing housing deeper into a slowdown even as the broader labor market remains stable.
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