Jobless Expansion?

The economy appears to be in a jobless expansion, with labor markets showing material weakness but many other economic growth indicators still flashing green (at worst with a tint of yellow). Purchasing manager indices (surveys sent to those in charge of buying goods and services) are mostly in expansionary territory while third-quarter GDP (economic output) is poised to show continued growth. The lack of job creation is giving the Federal Reserve room to resume rate cutting – starting with its upcoming meeting on September 16-17 – despite inflation remaining stubbornly above its 2% target. In this environment, we remain modestly overweight risk, preferring stocks over bonds and U.S. equities over their international counterparts.

Click to read more: September Portfolio Pulse - Jobless Expansion?