Week ending Nov. 3: Surprise drop in unemployment rate stokes inflation concerns.
A surprising drop in the unemployment rate renewed concerns about inflation, as wages bid up during tightening labor markets eventually translates into higher prices. At the same time, reports of soft retail sales in October and a decline in manufacturing activity suggest the economy might be slowing too quickly. The Morningstar US Market Index closed down 0.94% for the week ending Nov. 3.
The Morningstar Market Barometer reflected investors' pessimism as all nine Morningstar style indexes finished in the red for the week. In spite of stellar year-to-date performance, the Morningstar Small Core Index dropped 1.6%, making it the worst performer for the week. Meanwhile, despite shedding 0.7% for the week, the Morningstar Mid Value Index claimed the top spot.