- The Federal Reserve cut interest rates by 50 basis points in an emergency meeting
- The ISM Manufacturing index registered 50.1 in February, signaling expansion in the sector for the second straight month
- The US labor market added 273,000 jobs in February
Top Three Market HeadlinesFederal Reserve Enacts Emergency Rate Cut: The Federal Reserve last week enacted an emergency interest rate cut, reducing the target federal-funds rate by 0.50%, leaving it at a range of 1.00% to 1.25%. Central bank officials were in universal agreement on the rate cut as they look to insulate the U.S. economy from potential effects related to the COVID-19 virus. The epidemic has roiled global markets, causing the shutdown of manufacturing facilities in parts of Asia and impacting global supply chains. While the interest-rate cut won’t necessarily stem immediate economic impacts of the virus, Fed Chairman Jerome Powell said he hoped it would improve confidence, stem financial-market disruptions, and speed up a recovery once the epidemic is under control.
U.S. Economy Signals Expansion Through February: While concerns grow over the continued spread and potential global economic impact of COVID-19, economic conditions in the U.S. remained in expansionary territory through February, according to the closely-watched monthly surveys of business executives conducted by the Institute of Supply Management (ISM). The ISM Manufacturing indicator registered 50.1, its second straight above-50 reading (greater than 50 indicates expansion of business activity, while less than 50 indicates contraction). Meanwhile, the services sector continued to expand at a fast rate, as the ISM Non-Manufacturing index came in at 57.3, an increase from 55.5 in the prior month.
February Jobs Report Smashes Expectations: For the second month in a row, the U.S. employment market produced robust job growth, adding 273,000 jobs in February, according to the Department of Labor. Totals for the prior two months were also revised upwards by 85,000, putting the trailing three-month average gains at 243,000 per month, up from 2019’s average of 178,000. Particular strength in February was noted in the health care and construction industries, with the latter aided by favorable weather. Wages rose 3% during the month from a year earlier and the jobless rate registered 3.5%, its lowest level since 1969.