The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
U.S. manufacturing is gaining momentum, with the ISM PMI reaching a four-year high and durable goods orders jumping sharply in April. But the upbeat production data come with a catch: input prices remain elevated and hiring is still soft, keeping inflation and margin pressure in focus.
Private payrolls increased 122K in May, topping forecasts and extending the labor market’s moderate rebound. The modest beat suggests hiring remains resilient without overheating, while steady 4.4% wage growth keeps inflation concerns alive and may temper expectations for near-term Fed rate cuts.
April’s JOLTS report showed U.S. job openings surged well above forecasts, signaling firmer labor demand. But hiring fell and quits stayed soft, suggesting a slower-moving job market beneath the headline strength. The mixed read makes near-term Fed rate cuts less likely.
May’s ISM report showed manufacturing expanding at its fastest pace in four years, with new orders jumping and output improving. But hiring stayed weak and prices remained stubbornly high, underscoring a mixed backdrop that supports growth while complicating the Fed’s path on rates.
A packed week of ISM services, factory orders, the Beige Book and Fed speeches leads into the June 5 jobs report. The data will test whether the U.S. economy is slowing without a clean break in hiring or price pressure, keeping policy expectations and Treasury yields in focus.
A softer monthly core PCE reading gave markets relief, but the broader U.S. data mix stayed uneasy. GDP was revised lower, durable goods were boosted by aircraft, housing weakened, and consumers leaned on inflation rather than income growth. The economy remained resilient, but not comfortably so.
Mortgage rates edged higher again, with the 30-year fixed climbing to 6.53% and the 15-year to 5.87%. The move pushed borrowing costs to a 9-month high, squeezed affordability, and helped drive mortgage applications down 8.5% as housing demand cooled.
April’s housing report showed demand weakening faster than supply. New home sales missed expectations, inventory climbed, and months’ supply rose, while building permits rebounded modestly. The data points to a cooling market shaped by higher mortgage rates, not a collapse, as affordability continues to weigh on buyers.
The second estimate of Q1 GDP showed the U.S. economy grew at a 1.6% annualized pace, below expectations and revised down from the advance reading. Inflation also remained elevated, keeping the Fed in hold mode as weaker investment and softer consumer spending weighed on growth.
Weekly jobless claims rose to 215,000 and continuing claims climbed to 1.786 million, signaling a gradual cooling in the U.S. labor market. The data points to softer hiring and slower reemployment, but layoffs remain contained, keeping recession fears and Fed rate-cut pressure in check.
The Richmond Fed Manufacturing Index surged to 13 in May, far above expectations, as new orders and shipments strengthened across the Fifth District. The report points to firmer factory momentum, easing price pressures, and a slightly more hawkish backdrop for Fed rate-cut hopes.
The MBA’s latest survey shows the 30-year mortgage rate rising to 6.65%, its highest level since August, while total applications dropped 8.5%. Refinancing was hit hardest, but purchase demand also softened, underscoring how quickly higher borrowing costs are cooling housing activity.
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