This Weekly Market Update reviews the top market headlines: Payroll Growth Slowed Significantly in August, U.S. Economic Expansion Continues in August, Chip Shortage Continues to Rattle Auto Industry

Top Three Market Headlines

Job Growth SlowsMarkedly in August: The Labor Department announced last Friday that U.S. employers added only 235,000 jobs in August, well short of economists' expectations of 720,000 and much lower than July's increase of 1.1 million. Possibly driven by rising fears about the Covid-19 Delta variant, the leisure and hospitality sector saw no net job gains over the month after averaging 350,000 additions over the previous six months; within this category, 42,000 jobs were lost in food services and drinking places. Although gains slowed, the unemployment rate dropped slightly to 5.2% from 5.4% the previous month.

Business Surveys Indicate Continued U.S. Economic Expansion: Business activity in the U.S. continued expanding in August, according to surveys of business executives released last week by the Institute of Supply Management (ISM). The ISM Manufacturing Index registered 59.9, up slightly from July's level of 59.5. Growth cooled slightly in the services sector, with the ISM Services Index fallingto 61.7 in August from July's all-time high of 64.1, though the August reading remained well above the 50 mark that distinguishes expansion from contraction. Services sector respondents attributed the slower growth to labor shortages, logistic delays, and lack of materials.

Tight Inventories Constrain Vehicle Sales in August: U.S. light vehicle sales plummeted in August, with the seasonally-adjusted annual rate (SAAR) of sales falling 10% from the prior month to a 15-month low of 13.1 million, according to the Bureau of Economic Analysis. The rate of sales is down nearly 30% from a multi[1]year high SAAR of 18.3 million as recently as March. The key culprit behind the slowdown is dwindling inventory on dealer lots resulting from the persistent semiconductor chip shortage that has constrained production of new vehicles this year. It is estimated that there are less than a million vehicles in inventory for sale at present, down from approximately 3 million two years ago.

As of September 7, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.03% 3.97% 16.76% 30.84%
S&P 500 1.51% 5.81% 21.95% 33.25%
Russell 2000 3.55% -0.65% 16.77% 49.91%
MSCI EAFE 2.24% 4.06% 13.24% 28.69%
MSCI Emerging Markets 3.96% -3.75% 3.42% 20.98%
FTSE NAREIT 4.53% 8.82% 32.71% 42.14%
Bloomberg Commodity 2.28% 2.73% 24.46% 34.41%
Barclays U.S. Aggregate 0.16% 0.86% -0.76% -0.66%

WSJ 9/2/2021, WSJ 9/3/2021, NASDAQ 9/3/2021, Barron’s 9/2/2021, Institute for Supply Management 9/2/2021, US Bureau of Labor Statistics, 9/3/2021, FactSet. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific