This Weekly Market Update reviews the top market headlines: Pace of Economic Activity Moderates in January, January Jobs Report Surprises to the Upside, U.S. National Debt Tops $30 Trillion

Top Three Market Headlines

Pace of Economic Activity Moderates in January: U.S. economic activity continued to expand in January, albeit at a slower rate, according to surveys of business executives released last week by the Institute for Supply Management (ISM). The ISM Manufacturing index moderated slightly to 57.6 in January from 58.8 in December, while the ISM Services index registered 59.9 in January, down from 62.3 the prior month and 69.1 in November. (A reading above 50 indicates expansion of activity, while a sub-50 mark reflects contraction). This was the 20th straight month both indices signaled expansion of activity.

January Jobs Report Surprises to the Upside: The Labor Department reported last Friday that U.S. nonfarm payrolls increased by 467,000 in January, exceeding economists’ expectations. In addition, the tally of gains for the prior two months was increased by a little more than 700,000. The leisure and hospitality sector added 151,000 jobs in January, indicating that hiring demand remained strong despite the Omicron variant. At the same time, the unemployment rate ticked up slightly in January to 4.0% from 3.9% as more people joined the workforce. The report also indicated mounting pressures on wages, as average hourly earnings increased by 5.7% in January compared to the previous year.

U.S. National Debt Tops $30 Trillion: The U.S. national debt crossed the $30 trillion threshold for the first time at the end of January, it was reported last week. Since January 2020, the national debt has grown by $7 trillion, thanks in large part to aggressive fiscal spending programs enacted in the wake of the Covid-19 pandemic. For the fiscal year ended 9/30/2021, the federal deficit, or annual shortfall of revenues relative to spending, reached $2.8 trillion, which equated to 12.4% of U.S. gross domestic product (GDP), according to the Congressional Budget Office; this compared to a deficit of 4.7% of GDP in the fiscal year ended 9/30/2019, prior to onset of the pandemic.

As of February 7, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.95% -4.72% -4.72% 9.39%
S&P 500 1.57% -5.27% -5.47% 17.90%
Russell 2000 1.74% -10.78% -10.78% -8.18%
MSCI EAFE 2.10% -3.75% -3.75% 6.14%
MSCI Emerging Markets 2.53% -0.84% -0.84% -10.16%
FTSE NAREIT -0.24% -8.16% -8.16% 27.71%
Bloomberg Commodity 2.27% 10.51% 10.51% 33.73%
Barclays U.S. Aggregate -0.95% -3.05% -3.05% -3.60%

WSJ 2/1/2022, ISM 2/4/22 BLS 2/4/2022. 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 situation.