Today’s sell-off was in the cards, but got worse on the International Money Funds’ (IMF) news regarding the global economy. The organization lowered its world output projection by 0.1% which doesn’t seem like news to me. On the other hand, hiking the US growth estimate by 0.5% should have been seen as great news. Sure, this is a portion of the global economy, but it is still pretty good news, even if that only takes us to 2.2% growth. More worrisome is that Europe cannot get out of its own way as it is trying to straddle financial discipline and economic stimulus at the same time. Of course it not real financial discipline, but lots of nations have made cuts to ridiculous freebies such as getting paid for 14 months of work every calendar year. Brazil is the other standout, and that’s important considering the presidential runoff. Although it is still a long shot that this kind of news should bolster the campaign of the pro-business candidate.

Though we are not in panic mode, the market is searching for clearer answers. Maybe they begin to trickle in tomorrow with the start of earnings season and the latest Fed minutes.

No JOLT for the Market

By Jennifer Coombs, Research Analyst

Triple-digit losses have seemingly become the norm for the major equity indices. Nevertheless, the decline is once again due to international woes, this time in the form of the International Monetary Fund (IMF) lowering its global FY15 growth outlook to 3.8% from 4.0%. The chief economist at the IMF noted three major risks that are currently hindering grow of the global economy: 1) the long period of low interest rates, 2) geopolitical risks (i.e. Russia/Ukraine, Middle East), and 3) the stalling recovery in the Euro Area. The following chart shows the growth of the Euro Area’s GDP since 1996. However, there has been stagnant growth in the region since 2010.

Back here in the US, the Labor Department’s Job Openings and Labor Turnover Survey (or JOLTS) provided some encouraging numbers for jobs growth, albeit the numbers are delayed by two months. There were 4.835 million job openings on the last business day of August, which was up from the revised 4.605 million (from 4.673 million) in July. The hires rate (3.3%) was down and the separations rate (3.2%) was essentially unchanged in August. Within separations, the quits rate (1.8% or 2.473 million quits) was unchanged and the layoffs and discharges rate (1.1%) was also little changed. Over the 12 months ending in August 2014, hires totaled 56.2 million and separations totaled 53.6 million, yielding a net employment gain of just 2.5 million. Below is a chart of the number of total job openings relative to the number of workers who quit their job since 2003.

The monthly report on changes in consumer credit for the month of August will be released later this afternoon.