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Investing Specialists

Slower Healthcare Job Growth Raises New Concerns

Though the market was focused this week on Brexit and the Fed, we remain much more worried about slowing growth in the U.S.

Markets didn't move too far this week, reflecting the economic data that generally hit expectations, but was nevertheless lackluster. Developed-world equities were generally weaker as increased chatter of a U.S. Federal Reserve rate increase in December kept a lid on market activity. Renewed talk of a quicker Brexit and Prime Minister Theresa May's setting a date to commence the proceedings also hurt European markets. Emerging markets managed to show small gains, related to better economic data in some emerging-markets regions. Hurricane worries also helped along the commodities sector, moving up for the week after a dreadful performance for the third quarter. 

U.S economic news this week obviously wasn't great, as the Atlanta Fed's GDPNow forecast dropped to just 2.1% for the third quarter, not all that much better than the 1.4% rate in the second quarter. In the United States the week kicked off with weak auto sales that showed little growth from a year ago. Construction also continued its slump in August. However, on Tuesday, purchasing manager data from both the ISM and Markit registered a reading of 51.5, indicating modest growth. Still, the Markit index was down modestly in the United States, even as the ISM reading improved. The current low reading shows that U.S. manufacturing isn't moving very fast in either direction. Year-over-year U.S. auto sales growth rates also continued to fall to nearly zero as this pillar of U.S. economic growth continues to crumble.