September 3, 2024

We are in the middle of bookend labor events this week. We started out with Labor Day on Monday, a time for celebrating the American workers who have made our country a world leader. We will then close the week with the employment report for the month of August. Both events are very significant. Even though Labor Day is not the true end of summer, it represents the end of summer for many, as the kids are back in school and summer vacations are typically over. It is also the start of the fall real estate season, a season which has the potential to become busier in light of lower mortgage rates.

The employment report will also be an important event, especially considering the weaker than expected July jobs report and the upcoming meeting of the Federal Reserve in two weeks. The markets seem to be counting on the first move by the Fed to lower short-term interest rates at this meeting. Along with the job market slowing down, we have also seen considerable progress against inflation – including a moderate reading for the personal consumption expenditures price index (PCE) released last week.

We will see one more round of inflation data next week before the Fed meets in September. Continued good news on inflation, together with a moderation in hiring would just about clinch the Fed making a move at their next meeting. The markets have become very uneasy about the prospects of the economy moving forward and a bit of a push from the Fed could be just what the doctor ordered with regard to providing a cushion for an economic soft landing.

Source: Origination Pro

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