Weekly market commentary | BlackRock Investment Institute
Markets have swung sharply this year. AI buzz gave way to doubts over AI spending. In August, a rising unemployment rate in the U.S. sparked recession fears, spurring markets to expect rate cuts as deep as in past recessions. We said recession fears and such rate cut pricing were overdone. This is not a typical business cycle – it’s a world shaped by supply constraints. The recent rise in unemployment was not due to layoffs but rather elevated immigration expanding the labor supply. Employment growth is still robust, Friday’s job data confirmed. See the chart. The unemployment rate has fallen again and markets have somewhat scaled back Federal Reserve rate cut expectations. Wage growth has cooled, bringing down inflation. Yet…
