Markets ended the week higher, supported by optimism around U.S.-China trade talks and a strong jobs report. The S&P 500 reached its highest level since February. However, a spike in unemployment claims raised some concerns. Stocks were mixed early in the week due to profit-taking and fluctuated on trade and economic news. Technology and communication services led sectors, while consumer-related sectors lagged. Treasury yields rose, and crude oil posted its first weekly gain after three weeks of losses.
Last Week’s Economic News
- Jobs Report: Employment rose by 139,000 in May, with gains in health care, leisure, and social assistance. Unemployment rate remained at 4.2%. Labor force participation and employment-population ratios declined. Hourly earnings rose 0.4% to $36.24.
- Job Openings: April openings rose to 7.4 million. Hires increased, while quits dropped and layoffs rose.
- Manufacturing: Manufacturing activity strengthened in May. The PMI rose to 52.0, the highest since February, driven by preemptive stockpiling due to tariffs.
- Services: Service sector activity expanded in May; the PMI rose to 53.7, reflecting sales growth but increasing backlogs.
- Trade: April trade deficit narrowed to $61.6 billion. Exports rose 3.0%, imports fell 16.3%. Deficit up 65.7% from a year ago.
- Gas Prices: National average dropped to $3.127/gallon. Prices fell across most regions.
- Unemployment Claims: Initial claims rose to 247,000. Continued claims slightly decreased. Highest insured unemployment rates were in NJ, CA, and WA.
Eye on the Week Ahead
Inflation data for May is available this week with the releases of both the Consumer Price Index (CPI) and the Producer Price Index (PPI). The CPI rose 0.2% in April but dipped to 2.3% for the 12 months ended in April. The PPI fell 0.5% in April but rose 2.4% over the last 12 months.
Have a nice week!
Sincerely,
Robert G. Carpenter