This Weekly Financial Markets Update reviews the top market headlines: December Jobs Report Beats Expectations, Fed Minutes Point to Slower Pace of Policy Easing, Services and Manufacturing Sector Surveys Improve
  • The U.S. economy added 256,000 jobs in December
  • The Federal Reserve cut the target federal funds rate range to 4.25%-4.50% in December
  • The ISM Services Index registered 54.1% in December

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Top Three Market Headlines

December Jobs Report Beats Expectations: The U.S. economy added 256,000 jobs in December, according to the U.S. Department of Labor, exceeding economists' consensus estimate of 156,000. This was the largest tally of monthly gains since March of 2023. Sectors seeing the most job growth in December included healthcare, retail, leisure and hospitality, and government. Meanwhile, the unemployment rate fell slightly, ticking down to 4.1% versus 4.2% in November. Average hourly earnings in December rose at a 3.9% annual pace, slightly slower than the previous month.

Fed Minutes Point to Slower Pace of Policy Easing: Minutes released last week from the Federal Reserve's December meeting reflected broad support for the central bank's decision to enact another quarter percentage point cut to the federal funds rate. This was the third such cut in four months and brought the Fed's target policy rate to a range of 4.25%-4.50%. According to the minutes, meeting participants noted that inflation remained somewhat elevated, the economy continued to expand at a solid pace, and labor market conditions had eased. Notably, officials also indicated they believed the Fed was near the point at which it would be appropriate to slow the pace of policy easing.

Services and Manufacturing Sector Surveys Improve: The Institute for Supply Management (ISM) reported that its ISM Services index registered 54.1% in December, up from 52.1% in the prior month. This was the sixth straight month the index surpassed the 50% threshold differentiating expansion of activity from contraction. Simultaneously, manufacturing activity edged closer to expansion territory with the ISM Manufacturing index hitting a nine-month high of 49.3%, up from 48.4% in November. In particular, new orders returned to expansion territory after indicating contraction for seven consecutive months.

As of January 10, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.56% -0.86% -0.86% 17.13%
S&P 500 -1.91% -0.89% -0.89% 23.51%
Russell 2000 -3.49% -1.82% -1.82% 12.65%
MSCI EAFE -0.43% -0.73% -0.73% 4.32%
MSCI Emerging Markets -1.50% -1.63% -1.63% 9.44%
FTSE NAREIT Equity -4.11% -3.64% -3.64% 5.01%
Bloomberg Commodity 4.15% 3.90% 3.90% 10.59%
Bloomberg U.S. Aggregate -0.87% -1.00% -1.00% 1.18%

Institute for Supply Management 1/3/2025 & 1/6/2025, Federal Reserve Board 1/8/2025, WSJ 1/10/2025, US Bureau of Labor Statistics 1/10/2025. 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.