The strong hiring growth in March was a positive development, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update. For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.

1. The Independent Market Observer
Economic Risk Factor Update
April 2024

2. Source: Institute for Supply Management, Haver Analytics
As of 4/3/2024
ISM Services: Services PMI Composite Index
Seasonally adjusted, 50+ = Increasing
The Service
Sector
Risk
Level

3. The Service Sector continued
• Service sector confidence fell in March, as the index dropped
from 52.6 in February to 51.4 in March.
• This marks two consecutive months of falling confidence.
• Despite the decline, service sector confidence still sits in
expansionary territory.
Risk
Level

4. Source: Bureau of Labor Statistics, Haver Analytics
As of 4/5/2024
All Employees: Total Nonfarm
% Change – Year to Year, Seasonally adjusted
Private
Employment:
Annual
Change
Risk
Level

5. Private Employment: Annual Change continued
• 303,000 jobs were added in March, following the strong
270,000 jobs that were added in February.
• This marks 39 consecutive months of job growth, highlighting
the current health of the labor market despite the challenges
created by inflation and the tight labor supply.
Risk
Level

6. Source: Haver Analytics
As of 4/1/2024
Spread Between 10-Year U.S. Treasury and 3-Month U.S. Treasury
Yield Curve
(10-Year Minus
3-Month
Treasury Rates)
Risk
Level

7. Yield Curve (10-Year Minus 3-Month Treasury Rates)
continued
• The yield curve inversion widened in March, due to a drop in
long-term interest rates. The 10-year Treasury yield fell from
4.25% to 4.20%.
• The 3-month Treasury yield rose from 5.45% at the end of
February to 5.46% at the end of March.
• This marks 18 consecutive months with an inverted
3-month 10-year yield curve. While this doesn’t guarantee that
the economy will enter a recession, it’s a widely monitored
technical signal that could indicate further slowdowns.
Risk
Level

8. Source: The Conference Board/Haver Analytics
As of 3/26/2024
Conference Board: Consumer Confidence
% Change – Year to Year Seasonally adjusted, 1985=100
Consumer
Confidence:
Annual
Change
Risk
Level

9. Consumer Confidence: Annual Change continued
• Consumer confidence fell from 104.8 in February to 104.7
in March.
• Despite the decline, consumer confidence improved 0.67
percent on a year-over-year basis in March.
Risk
Level

10. Conclusion: Growth Continues but Risks Remain
• The data releases in March showed signs of continued
economic growth.
• The strong hiring growth signaled continued demand
for workers.
• Given the declines during the month, service sector and
consumer confidence are worth monitoring going forward.
• The path of recovery remains uncertain in the short term, and
caution is still warranted.
Risk
Level

11. Certain sections of this commentary contain forward-
looking statements that are based on our reasonable
expectations, estimates, projections, and assumptions.
Forward-looking statements are not guarantees of future
performance and involve certain risks and uncertainties,
which are difficult to predict. Past performance is not
indicative of future results.
Diversification does not assure a profit or protect against
loss in declining markets. All indices are unmanaged, and
investors cannot invest directly in an index.
The information contained herein is provided for
informational purposes only and is based upon sources
believed to be reliable. No guarantee is made as to the
completeness or accuracy of the information.
Disclosure