According to the Bureau of Labor Statistics (BLS), the US economy created just 12,000 new jobs in October. This was much lower than the Dow Jones estimate of 100,000, but the weaker month did not impact the unemployment rate which remained at 4.1%.
Markets welcomed the weaker-than-expected numbers as justification for the Fed to continue with a couple more interest rate cuts before yearend.
However, US corporate profits for many companies are not signaling a need for lower interest rates. Corporate earnings for the 3rd quarter have been solid with 324 companies in the S&P 500 reporting so far. Of those 324 companies, 77.2% reported earnings above analyst expectations. This compares to a long-term average of 66.9%. Communication services (+24.1%), technology (+17.7%), and healthcare companies (+12.8%) have reported the strongest earnings growth, while materials (-4.0%), industrials (-7.5%), and energy companies (-27.5%) have reported 3rd quarter losses.
https://lipperalpha.refinitiv.com/2024/10/sp-500-earnings-dashboard-24q3-october-31-2024/
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
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