Weekly Market Update: September 15, 2025

The nation added an estimated 22,000 jobs in August. It marked the fourth-consecutive month of minuscule gains, with job creation averaging roughly 27,000 a month during the 123-day period. The Labor Department report also showed that the unemployment rate rose to 4.3%, the highest level since 2021, while the labor force participation rate was low (at 62.3%), a development that indicates increasing slack in the labor market. 

Meanwhile, inflation remains above the Federal Reserve’s comfort level. However, there was progress at the producer (wholesale) level in August. Specifically, both the Producer Price Index (PPI) and the core PPI, which excludes food and energy, fell 0.1% last month. On a 12-month basis, the PPI and core PPI increased 2.6% and 2.8%, easing notably from the July readings. The August data on consumer prices, which was due after we went to press, may provide more clarity about whether higher costs due to tariffs are being pushed along to the consumer. 

The central bank appears ready to resume cutting the benchmark short-term interest rate. Note that the Federal Open Market Committee (FOMC) was scheduled to hold its September meeting shortly after we went to press, at which time a quarter-point reduction was expected. While inflation has proven stubborn this year, the lead bank is increasingly concerned about the softening job market and slowing pace of economic growth, both of which were underscored in the latest dour Fed Beige Book summation of economic conditions. 

The gold market reflects the Federal Reserve’s anxieties. The price of gold, which is viewed as a hedge against inflation and a weak U.S. dollar, as well as a safe-haven asset during periods of economic slowdowns, recently hit an all-time high of just under $3,700 an ounce (up more than 40% year to date). 

Conclusion: The major equity averages got off to a solid start in September, historically the worst month for stocks. However, we still would not rule out a pickup in near-term volatility, as the market often has a negative reaction to the Fed cutting interest rates in an effort to support the labor market and economy. Thus, we recommend maintaining a portfolio consisting of stocks of high-quality companies and cash-equivalent securities.

Source: ValueLine.com