Economy
The US economy added 115,000 jobs in April, more than the ~55,000 expected. The report was an encouraging sign that the labor market has stabilized, coming off a strong number in March. The unemployment rate remained at 4.3%. While the job gains aren't the large numbers we saw 3-4 years ago, we also aren't seeing an uptick in layoffs. The rolling four-week average of initial claims for unemployment insurance is hovering right around 200,000, the lowest level since January 2024. A stable labor market will allow the Fed and it's incoming chair Kevin Warsh to focus on inflation, and we'll get the April consumer price index report on Tuesday, May 12. We saw a jump in the March inflation numbers due to the oil spike resulting from the Iran war, and the Cleveland Fed's inflation forecast for April is for another month-over-month increase, this time of roughly 0.4%
Markets
The S&P 500 extended its gains for a sixth straight week, closing out the week higher by 2.33%. While the geopolitical situation remains murky, we've got a stable economy with strong corporate earnings giving Wall Street enough reason to look past higher oil prices and uncertainty around future moves in interest rates. FactSet reports that companies are beating their earnings estimates at a higher-than-average pace by a significantly wider margin than historically average. For the year, the S&P 500 is now up more than 8%. We're seeing an incredible run for stocks. The market has more than doubled since the October 2022 lows.
What We're Reading
- A Government Debt Crisis?- Ben Carlson
- How to Make Sense of This Strange Job Market- WSJ
Have a great weekend.
Dogwood Wealth Management