Economic Update 12-4

The government is still somewhat slow in catching up with new economic data following the extended shutdown. However, we have been seeing some releases that are helping to form our economic views. Today, we had the ADP Employment Change release. Now, granted, these are produced from private sources and are not government-sponsored indicators. Regardless, this is a key indicator of how private businesses are doing within the U.S. The November number showed 32,000 fewer jobs than October, which had a gain of 47,000. What is especially eye-catching is that the job cuts basically happened at small companies of fewer than 50 employees. Medium and larger-sized companies actually added 90,000 workers during the month. This is an interesting outcome since smaller companies generally are not as likely to reduce staff compared to larger firms. I think it speaks to the strength of the economy that larger firms feel confident in adding employees at this time. This is definitely an indicator to follow in the coming months.

We also had the September economic release this morning for manufacturing in the United States. On a monthly basis, the production level was flat when compared to August. However, on a year-over-year basis, we saw a gain of 1.5%. This is the strongest rise since April of 2022. For the month, there were significant gains in production levels for aerospace and transportation equipment. President Trump has been touting the progress in manufacturing within the U.S. for months. This is an indication that we are beginning to see progress in this key economic sector.

Next week will be a key event as we approach year-end. The Federal Reserve will hold its final meeting for the year. It is believed by most that they will be cutting the Fed Funds Rate by a quarter-point on Wednesday of next week. I think it is likely to happen, and the market should react in a positive manner. Much attention will be focused on their decision by the investment community.

Hopefully, everyone had an enjoyable Thanksgiving last week. We had our 20-month-old grandson in town, and it was certainly a fun time to be with family. It is also time to begin to prepare for Christmas and year-end. While it is a busy time of the year, take a few moments to remember all of the things we can be grateful for.