The first full week of June means that the jobs report for May was released to much fanfare. Friday morning, the Bureau of Labor Statistics (BLS) revealed that the economy added 172,000 jobs during that time. In addition, April’s report was revised upward to 179,000 jobs.
The May figure was well above analyst expectations as it was believed the economy added 85,000 jobs prior to the release. This will at least temporarily shut down the narrative that the economy has hit a rough patch. Combined with the latest surge in the equity markets, it’s safe to say that there is reason for optimism.
Of course, that wasn’t the only major news announcement to come out this week. Monday saw the release of the ISM Manufacturing PMI, which came in at 54.0. This was higher than the expected 53.3 and implies that the sector is undergoing a period of expansion.
On Tuesday, the JOLTS report was released and found that there were 7.62 million open positions in the country. Analysts had expected there to be 6.87 million jobs available before the release. An increase in open positions may imply that companies are hiring again and looking for talent. However, it could also imply that companies are content to leave open positions unfilled for the time being.
Wednesday saw the release of the other jobs report in the form of the ADP Nonfarm Payroll number. It found that there were 112,000 jobs added to the economy in May. This was only slightly higher than the 108,000 projected prior to the release, and April’s figure was left unchanged at 105,000.
Despite the positive employment news, the S&P 500 was down for the week. On Friday, it closed at 7,384, which was a drop of 188 points since the open on Monday. This was a loss of 2.48 percent over the last five trading days. For the week, the market made a high of 7,612 on Monday and closed near the low of the week on Friday.
Although the market lost ground on Friday, Dow Jones Industrial Average managed to eke out a win for the week. It would finish at 50,866, which was a gain of 12.81 points over the last five days. This was a gain of .03 percent since Monday. For the week, the index made a high of 51,614 on Thursday afternoon.
The Nasdaq was the biggest loser of the week tumbling 4.4 percent to finish the week at 28,957. This was a loss of 1,333 for the index that underperformed the other two major indexes because of its exposure to AI stocks. There is still some concern about where the market is heading, and some believe that AI is creating a bubble. There are also concerns that all the major indexes are overvalued right now and due for a correction. Despite its losses, the Nasdaq is still up 5 percent for the month and over 30 percent over the last 12 months.
In international news, Canada also released its jobs report for the month on Friday. The nation revealed that their economy added 86,000 jobs, and the unemployment rate now sits at 6.6 percent. For comparison, the American unemployment rate is 4.3 percent as of June 5. Australia announced that its gross domestic product (GDP) for the most recent quarter was 0.3 percent compared to an expected 0.5 percent. On Thursday evening, Switzerland revealed that inflation grew by 0.2 percent in May.
The upcoming week is sure to be another interesting one as inflation data will be revealed on Wednesday. Core inflation is expected to tick up to 2.9 percent from 2.8 percent while overall inflation is expected to increase to 4.2 percent on an annualized basis compared to 3.8 percent in April. In addition, the Price Producer Index for May will be released on Thursday, and prices are expected to have increased by 0.7 percent during that time.