- The ISM Manufacturing and Services indices registered 50.9% and 56.7%, respectively, in September
- 263,000 jobs were added in the U.S. in September
- OPEC+ agreed to cut oil output by 2 million barrels per day
Top Three Market Headlines
Business Surveys Soften: Business activity in the manufacturing sector decelerated again in September, according to surveys of executives conducted by the Institute for Supply Management (ISM). The ISM Manufacturing Index registered 50.9% for the month, falling from 52.8% in August. This was the lowest reading since May of 2020 and left the index barely above the 50% mark that differentiates expansion of activity (plus-50%) from contraction (sub-50%). Conditions in the services sector remained more robust, as the ISM Services index registered 56.7% for the month, down marginally from 56.9% in August. While the indices continued to show activity expanding, both have fallen sharply from 60%+ levels in late 2021, reflecting softening business trends.
Jobs Growth Slows: The Labor Department reported last week that U.S. nonfarm payrolls rose in September by 263,000, which was the lowest monthly total since April of 2021. Through the first nine months of 2022, monthly job growth has averaged 420,000, compared with 562,000 in 2021. Sectors recording the most growth in September included leisure and hospitality (+83,000) and health care (+60,000); for the latter, employment levels have now recovered to pre-pandemic levels of February 2020. Meanwhile, the unemployment rate fell from 3.7% to 3.5%, equaling the post-pandemic low registered earlier in the summer.
OPEC+ Agrees to Oil Production Cuts: The Organization of the Petroleum Exporting Countries (OPEC) cartel and allied oil producers, collectively known as OPEC+, last week approved a plan to cut the collective group's daily oil production by two million barrels a day beginning in November. The cuts represent an attempt to support the price of oil, which had fallen 37% from early June through late September on fears of a global economic slowdown. The move sent shockwaves through energy markets: the price of Brent Crude Oil, commonly viewed as the standard global oil price benchmark, surged 15% over the course of the week.