In September 2024, the service sector saw a slight improvement in confidence, with the PMI index rising to 51.5, although it has trended downwards over the year. Private employment continued to grow with 142,000 jobs added in August, leading to a decrease in the unemployment rate to 4.2%. Despite these positive signs, consumer confidence remains weak on a year-over-year basis, indicating potential economic challenges ahead.

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

2. Source: Institute for Supply Management, Haver Analytics
As of 9/5/2024
ISM Services: Services PMI Composite Index
Seasonally adjusted, 50+ = Increasing
The Service
Sector
Risk
Level

3. The Service Sector continued
• Service sector confidence improved modestly in August, with
the index rising from 51.4 in July to 51.5 in August.
• This result brought the index into expansionary territory for
the month; however, service sector confidence has trended
lower throughout the course of the year.
Risk
Level

4. Source: Bureau of Labor Statistics, Haver Analytics
As of 9/6/2024
All Employees: Total Nonfarm
% Change – Year to Year, Seasonally adjusted
Private
Employment:
Annual
Change
Risk
Level

5. Private Employment: Annual Change continued
• 142,000 jobs were added in August, following a downwardly
revised 89,000 jobs in July.
• This marked 44 consecutive months of job growth, and the
unemployment rate ticked down to 4.2% in August.
Risk
Level

6. Source: Haver Analytics
As of 8/30/2024
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 narrowed slightly during the month.
The 10-year Treasury yield fell from 4.09% to 3.91%.
• The 3-month Treasury yield fell from 5.41% in July to
5.21% in August.
• This marked 23 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 8/27/2024
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 rose from 101.9 in July to 103.3 in August.
• Consumer confidence fell 4.97% on a year-over-year basis in
August, marking six consecutive months of declining
year-over-year confidence.
• Given the continued year-over-year decline, we have left this
indicator at yellow for now.
Risk
Level

10. Conclusion: Slower Growth Continues
• The economic data releases in August showed signs of
improvement compared to July.
• While the hiring growth was positive, the labor market is still
showing signs of potential weakness ahead.
• Given the recent volatility, 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