Weekly Economic Update
Posted: June 4, 2018
Hiring, Household Spending Strengthen
Net job growth surprised to the upside in May: companies added 223,000 more workers than they laid off or fired. At 3.8%, the unemployment rate is now where the Federal Reserve thought it would be at the end of 2018, and it is also at its lowest level since April 2000. Underemployment, as measured by the Department of Labor’s U-6 jobless rate, fell 0.2% in May to a 17-year-low of 7.6%. Year-over-year wage growth was measured at 2.7% in this latest labor market snapshot. In another sign of a strong economy, the Department of Commerce said that consumer spending grew by a noteworthy 0.6% in April, with consumer incomes rising 0.3%.1,2
Consumer Confidence Rebounds
The Conference Board’s closely watched consumer confidence index improved to 128.0 in May, rising 2.4 points from its April mark. Analysts polled by MarketWatch expected a reading of 127.5.2
Factory Sector Continues to Boom
Growth picked up in U.S. manufacturing last month, according to the Institute for Supply Management’s May purchasing manager index. At an impressive reading of 58.7, the PMI was 1.4 points better than it was in April and matched its average reading over the past 12 months. The index has not been below 56.5 for a year. Any reading above 50.0 indicates expansion.3
Wall Street Shrugs at New Import Taxes
The Trump administration is following through on its pledge to impose tariffs on metals imported from Mexico, Canada, and the European Union – and all those trading partners are responding in kind. Incipient trade war or not, investors felt confident last week – confident enough to send the Nasdaq Composite another 1.62% higher in four days. The S&P 500 added 0.49% in those four sessions, but the Dow Jones Industrial Average fell 0.48% last week. Their respective Friday settlements: Dow, 24,635.21; Nasdaq, 7,554.33; S&P, 2,734.62.4,5
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1 - reuters.com/article/us-usa-economy/u-s-job-growth-surges-unemployment-rate-falls-to-3-8-percent-idUSKCN1IW1NX [6/1/18]
2 - marketwatch.com/economy-politics/calendars/economic [6/1/18]
3 - instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?SSO=1 [6/1/18]
4 - thestreet.com/markets/stocks-post-sharp-gains-after-jobs-report-14607822 [6/1/18]
5 - markets.wsj.com/us [6/1/18]