As April transitions into May, market participants got their first clear insight into how the new tariffs are impacting the economy. The Friday report from the Bureau of Labor Statistics offered some optimism as employers added 177,000 jobs over the past month. This was more than the projected 138,000 new jobs and was only slightly below last month’s figure of 185,000.
On Tuesday, the CB Consumer Confidence Report and the JOLTS Report were released. The consumer confidence reading was 86, which was lower than the March reading of 93.9, which had been revised upward prior to Tuesday’s release. We will have to wait to see if there will be revisions to the most recent number. There were 7.19 million positions available in the United States in April, compared to an expected 7.49 million openings. Last month, there were 7.48 million jobs available.
The Core PCE Price Index came in flat, which means that prices remained stable over the past month. Over the past few years, this has been the Federal Reserve’s preferred method of tracking inflation. A flat reading brings more speculation that rate cuts will be forthcoming.
Unemployment claims for the past week were higher than expected. There were 241,000 requests for benefits compared to an expected 224,000.
The ISM Manufacturing PMI reading came in at 48.7, which was slightly higher than expected. It was believed that the April reading would come in at 48.
On Friday, average hourly earnings as well as the unemployment rate for the past month were released. Average hourly earnings went up .2 percent compared to an expected .3 percent while the unemployment rate remained at 4.2 percent. A slower wage growth is considered less inflationary and should make it easier for the Fed to continue its easing cycle.
The S&P 500 was up 147 points this week to close at 5,686, which was a gain of 2.47 percent over the past five trading days. On Wednesday morning, the index made its weekly low of 5,452 before reversing and gaining ground the rest of the week. The market made its weekly high of 5,697 late Friday afternoon.
The Dow also finished the week in positive territory gaining 1,091 points to close the week at 41,317. This represented a gain of 2.71 percent for a market that had been particularly hard hit by the recent sell-off. As with the S&P 500, the Dow made its low of the week on Wednesday and closed near its weekly high. The low of the week was 39,843 while the high was 41,341.
Finally, the Nasdaq finished up 566 points to close the week at 17,977. This was a gain of 3.25 percent for the week. As you may expect, the index made its weekly low on Wednesday before reversing and closing near the weekly high. The weekly low for the Nasdaq was 17,021 while the weekly high was 18,042.
In international news, Mark Carney was elected to a full term as Canada’s head of state. He recently took over for Justin Trudeau who resigned after polling indicated that he had lost the confidence of his party and voters. Also this week, the Bank of Japan (BOJ) announced that it would take a more dovish approach to inflation, vowing to wait until 2027 to take more aggressive moves.
The upcoming week should be an interesting one as a couple of key reports are set to be released. On Tuesday, the ISM Services PMI will come out while the FOMC releases its May rate decision on Wednesday. It’s expected that rates will remain unchanged in May before a possible cut in June.