Tag: economics

The Markets (as of market close October 31, 2025)

Wall Street experienced notable volatility in October, only to see each of the benchmark indexes listed here close the month higher. The NASDAQ led the benchmarks, reaching a new record high. This surge was heavily influenced by a surge in AI stocks. Several major tech firms posted favorable corporate earnings data for the third quarter. Overall, the percentage of S&P 500 companies reporting positive earnings surprises, at 83.2% through quarter three, was above the long-term average. Among the market sectors, information technology, health care, and consumer discretionary moved higher, while financials and consumer staples were among the sectors that underperformed.

October saw the U.S. economy face slowing job growth, elevated inflation, and a significant monetary policy pivot by the Federal Reserve, which cut interest rates in October for a second time this year.

The government shutdown has hampered the release of important information, making it difficult to gauge the state of the economy. For instance, labor market data is lacking, as is the latest information on gross domestic product (GDP). The Consumer Price Index was released; however that data was based on information collected prior to the shutdown.

The U.S. bond market in October 2025 was primarily driven by Federal Reserve policy, inflation data, slowing labor market growth, and the impact of a U.S. government shutdown. Ten-year Treasury yields generally moved lower for the month, dropping by about 15.0 basis points from the start of October, although they bounced back somewhat toward the end of the month.

The month of October 2025 was largely characterized by a bearish trend for crude oil, with prices on track for a third consecutive monthly decline. Oversupply concerns played a large part in the downward movement of crude oil prices. The retail price of regular gasoline was $3.035 per gallon on October 27, $0.083 below the price a month earlier but $0.062 lower than the price a year ago.

Stock Market Indexes

Market/Index	2024 Close	Prior Month	As of 10/31	Monthly Change	YTD Change
DJIA	42,544.22	46,397.89	47,562.87	2.51%	11.80%
NASDAQ	19,310.79	22,660.01	23,724.96	4.70%	22.86%
S&P 500	5,881.63	6,688.46	6,840.20	2.27%	16.30%
Russell 2000	2,230.16	2,436.48	2,479.38	1.76%	11.17%
Global Dow	4,863.01	5,917.39	6,022.58	1.78%	23.84%
fed. funds target rate	4.25%-4.50%	4.00%-4.25%	3.75%-4.00%	-25 bps	-50 bps
10-year Treasuries	4.57%	4.14%	4.10%	-4 bps	-47 bps
US Dollar-DXY	108.44	97.82	99.72	1.94%	-8.04%
Crude Oil-CL=F	$71.76	$62.51	$60.88	-2.61%	-15.16%
Gold-GC=F	$2,638.50	$3,882.60	$4,013.40	3.37%	52.11%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

The government shutdown has impacted the flow of economic data. However, information from private-sector sources has been kept current, for the most part. The following summaries are based on the most recent data available as of the date of this publication.

• Employment: The latest employment report for August showed the labor market continued to weaken. Job growth ticked up 22,000 last month following an upwardly revised July increase of only 79,000. However, employment for June was also revised down by 27,000, from 14,000 to -13,000. With these revisions, employment in June and July combined was 21,000 lower than previously reported. In August, the unemployment rate ticked up 0.1 percentage point to 4.3%. The number of unemployed persons in August, at 7.4 million, was 148,000 above the July estimate. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 104,000 to 1.9 million. These individuals accounted for 25.7% of all unemployed persons. The labor force participation rate in August rose 0.1 percentage point from July to 62.3%. The employment-population ratio in August, at 59.6%, was unchanged from the July estimate. Average hourly earnings increased by $0.10, or 0.3%, to $36.53 in August. Over the last 12 months, average hourly earnings rose by 3.7%, 0.2 percentage point below the 12-month average for the period ended in July. The average workweek in August was 34.2 hours for the third month in a row.
• There were 218,000 initial claims for unemployment insurance for the week ended September 20, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,926,000. A year ago, there were 221,000 initial claims, while the total number of workers receiving unemployment insurance was 1,831,000.
• FOMC/interest rates: In a 10-2 decision, the Federal Open Market Committee cut the fed funds target rate range by 25 basis points to 3.75%-4.00%. This is the lowest level since 2022. Despite the lack of economic data following the government shutdown, the Committee reached its policy decision, noting that downside risks to employment rose in recent months, while inflation remained somewhat elevated.
• GDP/budget: The economy, as measured by gross domestic product, advanced at an annualized rate of 3.8% in the second quarter, rebounding from a 0.6% decrease in the first quarter of 2025. Consumer spending, as measured by personal consumption expenditures, helped propel the second-quarter increase, climbing 2.5% after ticking up 0.6% in the first quarter. Spending rose for both services (2.6%) and goods (2.2%). After surging 38.0% in the first quarter, imports (which are a negative in the calculation of GDP) fell 29.3% in the second quarter. However, exports also declined in the second quarter, falling 1.8%, offsetting a 0.2% advance in the first quarter. Private investment declined 13.8% in the second quarter, cutting into the 23.3% gain in the prior quarter.
• September, the last month of fiscal year 2025, saw the federal budget register a surplus of $198 billion. The September surplus is partly attributable to the fact that outlays for military active duty and retirement, veterans benefits, Supplemental Security Income, and Medicare payments to health maintenance organizations and prescription drug plans accelerated into August, because September 1, 2025, the normal payment date, fell on a non-business day. September receipts were $544 billion. Customs duties (e.g., tariffs) added $30 billion to receipts in September. Government outlays in September were $346 billion. The deficit for fiscal year 2025, at $1,775 billion, was below the $1,817 billion deficit from the previous fiscal year. For fiscal year 2025, individual income tax receipts added up to $2,656 billion, while outlays for Social Security totaled $1,581 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable (after-tax) personal income each rose 0.4% in August after increasing 0.4% and 0.3%, respectively, in July. Consumer spending increased 0.6% in August after rising 0.5% the previous month. In August, the PCE price index rose 0.3% after increasing 0.2% in July. Core prices advanced 0.2% last month, unchanged from the July estimate. The PCE price index rose 2.7% since August 2024, while core prices increased 2.9% over the same period. Over the past 12 months ended in August, prices for goods increased 0.9% and prices for services rose 3.6%. Food prices increased 2.2%, while energy prices decreased 0.1%.
• The Consumer Price Index rose 0.3% in September after increasing 0.4% in August. Over the 12 months ended in September, the CPI rose 3.0%, 0.1 percentage point higher than the 12-month period ended in August. Core prices rose 0.2% in September and 3.0% since September 2024. The primary factor in the September increase was a 1.5% rise in energy prices, which was driven by a 4.1% jump in prices for gasoline. Prices for shelter rose 0.2% in September, while food prices rose 0.2%. Over the last 12 months ended in September, food prices increased 3.1%, energy prices rose 2.8%, and shelter prices advanced 3.6%.
• Prices at the wholesale level have been somewhat unpredictable this year. In August, the Producer Price Index declined 0.1% after advancing 0.7% (revised) in July. Producer prices increased 2.6% for the 12 months ended in August after rising 3.1% for the 12-month period ended in July. Excluding food and energy, producer prices dipped 0.1% in August but increased 2.8% for the year. In August, prices for goods edged up 0.1% from the previous month and 2.1% since August 2024. Last month saw prices for services decline 0.2% after a 0.7% increase in July. Prices for services rose 2.9% for the 12 months ended in August, lower than the 4.0% increase over the 12 months ended in July.
• Housing: Sales of existing homes increased 1.5% in September and were up 4.1% from a year earlier. The median existing-home price was $415,200 in September, lower than the August price of $422,400 but above the September 2024 estimate of $406,700. Unsold inventory of existing homes in September represented a 4.6-month supply at the current sales pace, up 1.3% from the August total and 14.0% above supply from a year ago. Sales of existing single-family homes rose 1.7% in September and 4.5% from the September 2024 figure. The median existing single-family home price was $420,700 in September ($427,700 in August), higher than the September 2024 estimate of $411,400.
• Sales of new single-family homes jumped higher in August, exceeding expectations, although inventory of available new homes for sale plunged lower from the previous month. Sales of new single-family homes rose 20.5% in August and were 15.4% above the August 2024 figure. The median sales price of new single-family houses sold in August was $413,500 ($395,100 in July), which was higher than the August 2024 estimate of $405,800. The August average sales price was $534,100 ($478,200 in July), up from the August 2024 average sales price of $475,600. Inventory of new single-family homes for sale in August represented a supply of 7.4 months at the current sales pace, 17.8% below the July estimate of 9.0 months and 9.8% below the August 2024 estimate of 8.2 months.
• Manufacturing: Industrial production edged up 0.1% in August after decreasing 0.4% in July. Manufacturing output rose 0.2% last month after edging down 0.1% in July. Within manufacturing, the production of motor vehicles and parts increased 2.6% in August, while factory output elsewhere edged up 0.1%. Mining moved up 0.9%, while utilities decreased 2.0%. Total industrial production was up 0.9% since August 2024.
• New orders for durable goods rose 2.9% in August after decreasing 2.7% in July. Transportation equipment drove the August increase after climbing 7.9%. New orders excluding transportation increased 0.4%. Excluding defense, new orders increased 1.9%. For the 12 months ended in August, durable goods orders advanced 7.1%.
• Imports and exports: Both import and export prices came in higher than expected in August. Import prices advanced 0.3% following a 0.2% decrease in July. Prices for imports were flat for the 12 months ended in August. Higher prices for nonfuel imports more than offset lower prices for fuel imports in August. Import fuel prices fell 10.1% over the past 12 months. Prices for nonfuel imports advanced 0.4% in August, the largest monthly advance since April 2024. Export prices rose 0.3% in August after rising 0.1% the previous month. Export prices increased 3.4% over the past 12 months, the largest 12-month increase since December 2022.
• The international trade in goods deficit for August was $85.5 billion, 16.8% under the July estimate. Exports of goods for August dipped 1.3%, while imports of goods declined 7.0%. Over the 12 months ended in August, exports decreased 0.4% and imports fell 4.1%.
• The latest information on international trade in goods and services, released September 4, saw the goods and services deficit increase 32.5% in July to $78.3 billion. Exports of goods increased 0.3% to $280.5 billion in July. Imports of goods rose 5.9% to $358.8 billion. For the 12 months ended in July 2025, the goods and services deficit increased $154.3 billion, or 30.9%, from the same period in 2024. Exports increased $103.1 billion, or 5.5%. Imports increased $257.5 billion, or 10.9%.
• International markets: October was a good month for European stock markets, with some indexes reaching record highs during the month. The key drivers in the European stock market centered around AI stocks, positive economic signals, and strong corporate earnings. While eurozone GDP rose 0.2% in the third quarter from the second, Germany and Italy saw little to no growth in the quarter. Stock markets in Asian countries experienced significant volatility, often reacting to developments in U.S.-China trade talks and key economic data. In October, the STOXX Europe 600 Index rose 0.3%; the United Kingdom’s FTSE advanced 2.4%; Japan’s Nikkei 225 Index jumped 14.5%; and China’s Shanghai Composite Index rose 1.9%.
• Consumer confidence: Consumer confidence fell 1.0 point in October to 94.6 from an upwardly revised 95.6 in September. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased 1.8 points to 129.3. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, decreased 2.9 points to 71.5. The Expectations Index has been below the threshold of 80 (typically signaling a recession ahead) since February 2025.

Eye on the Month Ahead

The primary focus in November will center on when the government shutdown will end and what economic information will be available at that time.

The Markets (second quarter through June 30, 2025)

Throughout the second quarter of 2025, global trade tensions caused by reciprocal tariffs and increasing unrest in the Middle East impacted the markets on a daily basis. A new wave of tariffs, particularly against China, created widespread market anxiety and triggered a downturn in April. This was followed by a 90-day de-escalation period announced in May, which temporarily paused some of the heightened tariffs and led to a sharp market rally. The uncertainty surrounding ongoing trade negotiations and the potential for new tariffs remained a key source of volatility throughout the quarter. After a tumultuous start to the quarter, the market showed remarkable resilience and ended June on a high note.

U.S. stocks rebounded in Q2. The S&P 500 began 2025 by enduring its first negative quarter since 2023, and followed that by a decline in April. However, the S&P 500 rebounded later in Q2 to post sharp gains in May and June. The NASDAQ, which had declined over 10.0% in the first quarter, showed strength in the second quarter, driven by growth in AI shares and digital stocks. The Dow and the small caps of the Russell 2000 also closed the second quarter higher. Among the market sectors, the second quarter saw information technology climb more than 23.0%, while communication services rose nearly 20.0%. Energy, health care, and real estate were the only market sectors to lose ground at the end of Q2. The bond market in the second quarter was characterized by heightened volatility and a complex interplay of economic and geopolitical factors, primarily driven by evolving tariff policies and persistent inflation concerns.

While inflation did not escalate to the level some analysts anticipated due to increased tariffs, consumer prices remained somewhat elevated. The Consumer Price Index (CPI) and the personal consumption expenditures (PCE) price index gradually decreased, easing some of the inflation fears that had built up earlier in the year. Despite the moderation, inflation remained above the Federal Reserve’s 2.0% target. The Fed maintained a cautious stance on interest rates, keeping them unchanged, as it balanced the need to control inflation with the potential for an economic slowdown. Corporate earnings reached new highs in the first quarter. While analysts projected slower growth in Q2, early returns on earnings have been mostly favorable, offering cautious optimism for companies in the second quarter. Job growth, while steady, also declined in Q2. The unemployment rate edged up to 4.2% in the second quarter. Both new claims for unemployment benefits and continuing claims rose during the second quarter.

The U.S. economy, as measured by gross domestic product, contracted by 0.5% in the first quarter, partly due to a surge in imports, as businesses increased costs for products and services in anticipation of tariff increases. While a rebound was expected for Q2, the overall growth trajectory of the economy for the remainder of 2025 is anticipated to be slower than in previous years. The U.S. real estate market could be best characterized in the second quarter by a continued upward trend in home prices, gradually improving inventory, and persistently elevated, though somewhat moderating, mortgage rates. The average 30-year fixed-rate mortgage as of June 18 was 6.81%, according to Freddie Mac, down from 6.84% one week before and lower than 6.87% one year ago. Gold prices in the second quarter saw significant activity, continuing the strong bullish trend from the first quarter. Gold prices remained at elevated levels, experiencing both sharp rallies and some pullbacks throughout Q2, continuing to set new record highs, with prices surpassing $3,400 per ounce and even touching $3,500 per ounce in April.

Gold, considered a safe haven during volatile economic times, had its best quarter since 1986 after rising nearly 20.0% in the first quarter, as the potential trade war and economic slowdown sent worried investors scurrying for more stable investments. Crude oil prices fluctuated in Q2, influenced by supply increases, softening demand forecasts, and lingering geopolitical tensions. While initial oversupply concerns and weak demand forecasts led to a dip, the latter part of the quarter saw prices rebound, largely driven by easing trade tensions and renewed geopolitical instability in the Middle East. The retail price for regular gasoline was $3.213 per gallon on June 23, $0.053 above the price a month earlier but $0.225 below the price from a year ago.

Stock Market Indexes

Market/Index	2024 Close	As of June 30	Monthly Change	Quarterly Change	YTD Change
DJIA	42,544.22	44,094.77	4.32%	4.98%	3.64%
NASDAQ	19,310.79	20,369.73	6.57%	17.75%	5.48%
S&P 500	5,881.63	6,204.95	4.96%	10.57%	5.50%
Russell 2000	2,230.16	2,175.04	5.26%	8.16%	-2.47%
Global Dow	4,863.01	5,519.07	3.62%	8.09%	13.49%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps	0 bps
10-year Treasuries	4.57%	4.23%	-17 bps	-1 bps	-34 bps
US Dollar-DXY	108.44	96.80	-2.65%	-7.09%	-10.73%
Crude Oil-CL=F	$71.76	$65.09	7.04%	-8.81%	-9.29%
Gold-GC=F	$2,638.50	$3,319.30	0.14%	5.16%	25.80%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Latest Economic Reports

• Employment: Job growth exceeded expectations in May after adding 139,000 new jobs (147,000 in April). The May total was short of the average monthly gain of 149,000. Employment was revised down by a combined 95,000 for March and April. In May, the unemployment rate was unchanged at 4.2%. The number of unemployed persons in May, at 7.2 million, changed marginally from the April estimate. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 218,000 to 1.5 million. These individuals accounted for 20.4% of all unemployed persons. The labor force participation rate in May fell 0.2 percentage point from April to 62.4%. The employment-population ratio decreased 0.3 percentage point to 59.7%. Average hourly earnings increased by $0.15, or 0.4%, to $36.24 in May. Over the last 12 months, average hourly earnings rose by 3.9%. The average workweek was 34.3 hours for the third month in a row.
• There were 236,000 initial claims for unemployment insurance for the week ended June 21, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,974,000. A year ago, there were 233,000 initial claims, while the total number of workers receiving unemployment insurance was 1,844,000.
• FOMC/interest rates: As expected, the Federal Open Market Committee held the federal funds target rate range at 4.25%-4.50% following its meeting in June. While the Committee indicated that while current economic activity continued to expand at a solid pace and the unemployment rate remained low, inflation was somewhat elevated. The FOMC highlighted increased uncertainty about the economic outlook and noted increased risks to both sides of its dual mandate of maximum employment and inflation at the rate of 2.0%.
• GDP/budget: The economy, as measured by gross domestic product, decelerated at an annualized rate of 0.5% in the first quarter of 2025 following an increase of 2.4% in the fourth quarter of 2024. Compared to the fourth quarter, the decrease in GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, a decrease in government spending, and a deceleration in consumer spending. These movements were partly offset by an increase in investment. Consumer spending, as measured by the PCE index, rose 0.5% in the first quarter, compared to a 4.0% advance in the fourth quarter. Spending on services inched up 0.6% in the first quarter, compared with a 3.0% increase in the fourth quarter. Consumer spending on goods rose 0.1% in the first quarter (6.2% in the fourth quarter). Fixed investment increased 7.6% in the first quarter after decreasing 1.1% in the fourth quarter. Nonresidential (business) fixed investment rose 10.3% in the first quarter after falling 3.0% in the previous quarter. Residential fixed investment decreased 1.3% in the first quarter following a 5.5% increase in the fourth quarter. Exports advanced 0.4% in the first quarter, compared with a 0.2% decline in the previous quarter. Imports vaulted 37.9% in the first quarter after ticking down 1.9% in the fourth quarter.
• May saw the federal budget register a deficit of $316 billion, in line with expectations and below the deficit of $347 billion in May 2024. May receipts were $371 billion versus $324 billion a year ago. May outlays were $687 billion versus $671 billion a year ago. The deficit through the first eight months of fiscal year 2025, at $1,365 billion, was above the $1,202 billion deficit over the first eight months of the previous fiscal year. Through the first eight months of fiscal year 2025, individual income tax receipts added up to $1,823 billion, while outlays for Social Security totaled $1,040 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income fell 0.4% in May (+0.7% in April), while disposable personal income declined 0.6% (+0.8% in April). Consumer spending decreased 0.1% in May after increasing 0.2% the previous month. In May, the PCE price index rose 0.1% and the PCE price index less food and energy (core prices) increased 0.2% for the month. The PCE price index rose 2.3% since May 2024, while core prices increased 2.7% over the same period. In May, prices for goods inched up 0.1% and services rose 0.2%. Food prices increased 0.2%, while energy prices declined 1.0%.
• The Consumer Price Index rose 0.1% in May after increasing 0.2% in April. Over the 12 months ended in May, the CPI rose 2.4%, 0.1 percentage point above the rate for the 12 months ended in April. Core prices (excluding food and energy) inched up 0.1% last month and 2.8% since May 2024. Prices for shelter rose 0.3% in May (the same increase as in April). Food prices increased 0.3% last month after falling 0.1% in April. Energy prices declined 1.0% in May, aided by a 2.6% decrease in gasoline prices. Over the last 12 months ended in May, food prices increased 2.9%, energy prices declined 3.5%, and shelter prices rose 3.9%.
• Prices at the wholesale level ticked up 0.1% in May following a revised 0.2% decrease in April, according to the Producer Price Index. Producer prices increased 2.6% for the 12 months ended in May after rising 2.4% for the 12-month period ended in April. Excluding food and energy, producer prices rose 0.1% in May and increased 3.0% for the year. In May, prices for goods increased 0.2% from the previous month and rose 1.3% since May 2024. Last month saw prices for services inch up 0.1% after a revised 0.4% decrease in April. Prices for services have risen 3.2% for the 12 months ended in May, a decrease of 0.1 percentage point from the increase over the 12 months ended in April.
• Housing: Sales of existing homes increased 0.8% in May but were 0.7% under the May 2024 figure. The median existing-home price, at $422,800, was a record high for the month of May. The median existing-home price was above the April estimate of $414,000 and 1.8% higher than the year-earlier price of $417,200. Unsold inventory of existing homes in May represented a 4.6-month supply at the current sales pace, marginally longer than the April supply of 4.4 months and well above the 3.8-month supply from a year ago. Sales of existing single-family homes rose 1.1% in May and were 0.3% above the estimate from April 2024. The median existing single-family home price was $427,800 in May ($418,000 in April), and 1.3% above the May 2024 estimate of $422,400.
• New single-family home sales declined 13.7% in May and were 6.3% below the May 2024 figure. The median sales price of new single-family houses sold in May was $426,600 ($411,400 in April), which was higher than the May 2024 estimate of $414,300. The May average sales price was $522,200 ($511,200 in April), up from the May 2024 average sales price of $499,300. Inventory of new single-family homes for sale in May represented a supply of 9.8 months at the current sales pace, up from the April estimate of 8.3 months and above the 8.5-month supply from a year earlier.
• Manufacturing: Industrial production declined 0.2% in May following a 0.1% advance in April. Manufacturing output increased 0.1% last month after falling 0.5% in April. In May, mining increased 0.1%, while utilities fell 2.9%. Over the 12 months ended in May, total industrial production was 0.6% above its year-earlier reading. Since May 2024, manufacturing increased 0.5%, utilities fell 1.6%, while mining increased 2.9%.
• New orders for durable goods jumped 16.4% in May after falling 6.6% in April. Transportation equipment drove the May advance after increasing 48.3%. New orders excluding transportation, increased 0.5%. Excluding defense, new orders rose 15.5%. For the 12 months ended in May, durable goods orders advanced 6.9%.
• Imports and exports: Import prices were unchanged in May following a 0.1% increase in April. Prices for imports increased 0.2% for the 12 months ended in May. Import fuel prices decreased 4.0% in May, the largest monthly decline since September 2024. Import fuel prices fell 15.7% over the past 12 months, which was the largest 12-month decline since the year ended September 2024. Export prices declined 0.9% in May, the largest one-month decrease since October 2023. Despite the May decline, export prices increased 1.7% from May 2024 to May 2025.
• The international trade in goods deficit in May was $96.6 billion, 11.1% above the April estimate. Exports of goods for May were 5.2% below April exports. Imports of goods for May were unchanged from April imports. Over the 12 months ended in May, exports rose 6.2%, while imports increased 2.8%.
• The latest information on international trade in goods and services, released June 5, saw the goods and services deficit fall 55.5% in April to $61.6 billion. Exports of goods increased 3.0% to $289.4 billion in April. Imports of goods declined 16.3% to $351.0 billion. For the 12 months ended in April 2025, the goods and services deficit increased $179.3 billion, or 65.7%, from the same period in 2024. Exports increased $58.4 billion, or 5.5%. Imports increased $237.8 billion, or 17.8%.
• International markets: In contrast to the U.S. market’s early struggles this year, international markets, particularly those in Europe and Asia, performed well, partly due to a weakening U.S. dollar, which boosted the value of non-U.S. equities. In June, the STOXX Europe 600 Index fell 1.2%; the United Kingdom’s FTSE dipped 0.2%; Japan’s Nikkei 225 Index gained 8.1%; and China’s Shanghai Composite Index climbed 2.9%. For the second quarter, the STOXX Europe 600 Index rose 1.4%; the United Kingdom’s FTSE gained 2.1%; Japan’s Nikkei 225 Index vaulted 13.7%; and China’s Shanghai Composite Index increased 3.3%
• Consumer confidence: Consumer confidence weakened in June, wiping out nearly half of May’s sharp gains. The Conference Board Consumer Confidence Index® declined by 5.4 points in May to 93.0. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased 6.4 points to 129.1. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, dropped 4.6 points to 69.0, substantially below the threshold of 80 that typically signals a recession ahead.

Eye on the Quarter Ahead

July is an important month for economic news, despite the fact that it is also a popular vacation month. The employment report for June is out at the beginning of the month. The number of new jobs has been waning over the past several months. The Federal Open Market Committee meets at the end of the month when interest rates may be adjusted lower.

The Markets (as of market close June 27, 2025)

Wall Street has come a long way from an April sell-off as investor optimism over trade agreements and a cooling of tensions in the Middle East helped lift stocks to record highs last week. The S&P 500 and the NASDAQ each hit new highs. Despite inflationary data coming in slightly above expectations, price pressures remained mostly muted (see below). Several market sectors enjoyed notable gains, led by information technology and financials. Energy and real estate moved lower last week. Crude oil prices, which had been surging, had their worst week since March 2023. Gold lost value for the second straight week as global tensions eased, leading to an increase in global trade that reduced the appeal of safe-haven investments. The dollar continued to tumble, hovering near its lowest level since early 2022. With inflation ticking higher in May, coupled with a decrease in consumer spending and a larger-than-expected contraction in first-quarter gross domestic product, the Federal Reserve may be inclined to resume its interest-rate cutting cycle sooner rather than later.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 6/27	Weekly Change	YTD Change
DJIA	42,544.22	42,206.82	43,819.27	3.82%	3.00%
NASDAQ	19,310.79	19,447.41	20,273.46	4.25%	4.99%
S&P 500	5,881.63	5,967.84	6,173.07	3.44%	4.96%
Russell 2000	2,230.16	2,109.27	2,172.53	3.00%	-2.58%
Global Dow	4,863.01	5,339.42	5,501.93	3.04%	13.14%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.37%	4.28%	-9 bps	-29 bps
US Dollar-DXY	108.44	98.82	97.29	-1.55%	-10.28%
Crude Oil-CL=F	$71.76	$75.00	$65.12	-13.17%	-9.25%
Gold-GC=F	$2,638.50	$3,383.40	$3,287.10	-2.85%	24.58%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The third and final estimate for first-quarter gross domestic product saw the economy contract 0.5%. Compared to the fourth quarter, when GDP rose 2.4%, the downturn in first-quarter GDP primarily reflected an upturn in imports, which are a negative in the calculation of GDP, a decrease in consumer spending, and a downturn in government spending, which was partly offset by an increase in fixed investment. The increase in imports was likely attributable, in large part, to purchases made in anticipation of price increases due to tariffs. It is expected that growth in imports will slow in the second quarter. Consumer spending, which is a major component of GDP, moved from a 4.0% increase in the fourth quarter to a 0.5% bump in the first quarter.
• Personal income decreased 0.4% in May, according to estimates by the U.S. Bureau of Economic Analysis. Disposable (after-tax) personal income declined 0.6%, while personal consumption expenditures (PCE) decreased 0.1%. The PCE price index for May increased 0.1%. Excluding food and energy, the PCE price index increased 0.2%. Over the last 12 months, the PCE price index increased 2.3%, while prices excluding food and energy rose 2.7%.
• The international trade in goods deficit was $96.6 billion in May, up $9.6 billion, or 11.1%, from April. Exports of goods for May were $179.2 billion, $9.7 billion, or 5.2%, less than April exports. Imports of goods for May were $275.8 billion, essentially unchanged from April imports. Over the last 12 months, exports have risen 6.2%, while imports advanced 2.8%.
• New orders for long-lasting manufactured goods soared 16.4% in May after falling 6.6% in April. New orders for durable goods have risen five of the last six months. New orders for transportation equipment surged 48.3% in May, driving the overall increase for the month. Excluding transportation equipment, new orders ticked up 0.5% last month. Excluding defense, new orders increased 15.5%. Since May 2024, new orders for durable goods rose 6.9%.
• Sales of new single-family houses in May were 13.7% below the April rate and were 6.3% under the May 2024 rate. The estimate of new houses for sale at the end of May represented a supply of 9.8 months at the current sales rate. The month’s supply was above the April estimate of 8.3 months and higher than the May 2024 estimate of 8.5 months. The median sales price of new houses sold in May was $426,600. This is 3.7% above the April price of $411,400 and is 3.0% above the May 2024 price of $414,300. The average sales price of new houses sold in May was $522,200. This is 2.2% above the April price of $511,200 and is 4.6% over the May 2024 price of $499,300.
• Sales of existing homes beat market expectations after unexpectedly rising 0.8% in May, rebounding from April’s 0.5% decline. Despite the May advance, existing home sales were 0.7% below the estimate from a year earlier. Inventory of existing homes for sale ticked up to 4.6 months, slightly higher than the April estimate of 4.4 months. The median existing home sales price in May was $422,800, up from $414,000 in April and higher than the May 2024 price of $417,200. Sales of existing single-family homes rose 1.1% in May and were 0.3% higher than the May 2024 estimate. The median single-family home price in May was $427,800, higher than the April price of $418,000 and above the $422,400 estimate from a year ago.
• The national average retail price for regular gasoline was $3.213 per gallon on June 23, $0.074 per gallon above the prior week’s price but $0.225 per gallon less than a year ago. Also, as of June 23, the East Coast price increased $0.089 to $3.072 per gallon; the Midwest price climbed $0.061 to $3.087 per gallon; the Gulf Coast price increased $0.109 to $2.844 per gallon; the Rocky Mountain price rose $0.063 to $3.177 per gallon; and the West Coast price increased $0.035 to $4.162 per gallon.
• For the week ended June 21, there were 236,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 14 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 14 was 1,974,000, an increase of 37,000 from the previous week’s level, which was revised down by 8,000. This is the highest level for insured unemployment since November 6, 2021, when it was 2,041,000. States and territories with the highest insured unemployment rates for the week ended June 7 were New Jersey (2.2%), California (2.1%), Massachusetts (2.0%), Rhode Island (2.0%), Washington (2.0%), the District of Columbia (1.9%), Minnesota (1.9%), Puerto Rico (1.9%), Illinois (1.6%), Nevada (1.6%), New York (1.6%), Oregon (1.6%), and Pennsylvania (1.6%). The largest increases in initial claims for unemployment insurance for the week ended June 14 were in Pennsylvania (+3,863), Connecticut (+1,750), Oregon (+1,258), Minnesota (+1,173), and Wisconsin (+846), while the largest decreases were in Illinois (-1,978), California (-1,933), New York (-1,402), Georgia (-1,200), and Iowa (-1,197).

Eye on the Week Ahead

Fourth of July week brings with it the June employment report. Total employment has been steadily dwindling over the past few months. April saw 147,000 (revised lower) new jobs added, while there were 139,000 new jobs reported in May.

The Markets (as of market close May 30, 2025)

May proved to be one of the best months for stocks in quite some time. During May, equities ebbed and flowed in response to uncertainty over U.S. trade policy and the impact of tariffs. May got off to a good start on the heels of strong corporate earnings data and a solid jobs report. The month brought some progress in the U.S.-China trade war, with an agreement for a 90-day reduction in tariffs while the parties continued talks aimed at a trade resolution. However, at the end of the month, President Trump accused China of breaching their recent trade deal. Middle East investment deals also helped push tech shares higher. The S&P 500 and the NASDAQ had their best months since 2023. Nine of the 11 market sectors ended May with gains, led by information technology, communication services, and consumer discretionary. Health care and energy closed in the red.

The latest inflation data was encouraging, however, it did not reflect the potential impact of global reciprocal tariffs, nor has it reached the Federal Reserve’s 2.0% inflation objective. Both the personal consumption expenditures (PCE) price index and the Consumer Price Index declined over the 12 months ended in April, while core prices (excluding food and energy prices) for both indexes remained steady. In lght of the potential impact of tariffs, it is likely that the Federal Reserve will maintain a cautious approach as it continues to assess the balance of risks to the economy.

Growth of the U.S. economy was muted in March. The gross domestic product (GDP) fell 0.2% in the first quarter following a 2.4% increase in the fourth quarter (see below). The widening of the trade deficit has had a substantial impact on economic growth in the first quarter. However, consumer spending rose 1.8%, the weakest increase since mid-2023. GDP’s annual growth rate slipped 0.4 percentage point to 2.1% for the 12 months ended in March.

Job growth exceeded expectations in April. Wages rose 3.8% over the past 12 months ended in April. The number of job openings fell by 288,000 in March to 7.2 million, which was the lowest total in six months and well below expectations. However, this data does not reflect the layoffs and cuts sanctioned by the Trump administration. The latest unemployment data showed total claims paid through mid-May increased by 121,000 from a year earlier (see below).

According to FactSet, during the first quarter of 2025, the health care sector reported the highest earnings growth of the 11 market sectors. Of the companies of the S&P 500, 68 firms reported negative earnings per share (EPS), above the five-year average of 57. However, 78% of S&P 500 companies exceeded EPS estimates. Overall, the S&P 500 reported earnings growth of 12.9%, the second straight quarter of double-digit growth. Nevertheless, tariffs and their potential impact on international trade have concerned companies. For instance, 381 companies indicated uncertainty with respect to future earnings, well above the five-year average of 224, while 121 companies cited the term “recession” during their earnings calls for the first quarter, which is above the five-year average of 79.

The real estate market had mixed results in April, with sales of existing homes falling, while new home sales rose. Mortgage rates remained elevated. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.81% as of May 15. That’s up from 6.76% one week before but down from 7.02% one year ago. Over the last few months, rates for 30-year fixed mortgages have remained stable and have fluctuated less than 20 basis points over that time.

Industrial production was unchanged in April but rose over the last 12 months. Manufacturing output, utilities, and mining each increased since April 2024. Purchasing managers reported manufacturing was unchanged in April, signaling only a slight increase in activity. Activity in the services sector slowed in April.

Ten-year Treasury yields closed the month higher as traders assessed developments in the trade war and government spending cuts. The two-year note closed May at about 3.9%, down 30 basis points from a month earlier. The dollar index fell for the fifth straight month, its longest losing streak in five years. Gold prices rose in May, marking their fifth straight monthly gain. Crude oil prices increased for the month, although trade tensions and supply concerns pressured prices for much of May. The retail price of regular gasoline was $3.160 per gallon on May 26, $0.027 below the price a month earlier and $0.417 lower than the price a year ago.

Stock Market Indexes

Market/Index	2024 Close	Prior Month	As of 5/30	Monthly Change	YTD Change
DJIA	42,544.22	40,669.36	42,270.07	3.94%	-0.64%
NASDAQ	19,310.79	17,446.34	19,113.77	9.56%	-1.02%
S&P 500	5,881.63	5,569.06	5,911.69	6.15%	0.51%
Russell 2000	2,230.16	1,964.12	2,066.29	5.20%	-7.35%
Global Dow	4,863.01	5,089.85	5,326.27	4.64%	9.53%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.17%	4.40%	23 bps	-17 bps
US Dollar-DXY	108.44	99.69	99.43	-0.26%	-8.31%
Crude Oil-CL=F	$71.76	$58.32	$60.81	4.27%	-15.26%
Gold-GC=F	$2,638.50	$3,303.50	$3,314.60	0.34%	25.62%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

• Employment: Job growth exceeded expectations in April, with the addition of 177,000 new jobs. The April total was roughly in line with the average monthly gain of 152,000. Employment was revised down by a combined 58,000 for February and March. In April, the unemployment rate was unchanged at 4.2%. The number of unemployed persons changed little at 7.2 million in April. The number of long-term unemployed (those jobless for 27 weeks or more) rose by 179,000 to 1.7 million. These individuals accounted for 23.5% of all unemployed persons. The labor force participation rate in April was 62.6%, up 0.1 percentage point from the previous month. The employment-population ratio also increased 0.1 percentage point to 60.0%. Average hourly earnings increased by $0.06, or 0.2%, to $36.06 in April. Over the last 12 months, average hourly earnings rose by 3.8%. The average workweek was unchanged at 34.3 hours.
• There were 240,000 initial claims for unemployment insurance for the week ended May 24, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,919,000. A year ago, there were 221,000 initial claims, while the total number of workers receiving unemployment insurance was 1,798,000.
• FOMC/interest rates: As expected, the Federal Open Market Committee held the federal funds target rate range at 4.25%-4.50% following its meeting in May. While the Committee indicated that current economic activity remained at a solid pace, the FOMC highlighted increased uncertainty about the economic outlook and noted increased risks to both sides of its dual mandate of maximum employment and inflation at the rate of 2.0%.
• GDP/budget: The economy, as measured by gross domestic product, decelerated at an annualized rate of 0.2% in the first quarter of 2025 following an increase of 2.4% in the fourth quarter of 2024. Compared to the fourth quarter, the decrease in GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, a decrease in government spending, and a deceleration in consumer spending. These movements were partly offset by increases in investment and exports. Consumer spending, as measured by the personal consumption expenditures index, rose 1.2% in the first quarter, compared to a 4.0% rise in the fourth quarter. Spending on services rose 1.7% in the first quarter, compared with a 3.0% increase in the fourth quarter. Consumer spending on goods ticked up 0.1% in the first quarter (6.2% in the fourth quarter). Fixed investment increased 7.8% in the first quarter after decreasing 1.1% in the fourth quarter. Nonresidential (business) fixed investment rose 10.3% in the first quarter after falling 3.0% in the previous quarter. Residential fixed investment decreased 0.6% in the first quarter following a 5.5% increase in the fourth quarter. Exports advanced 2.4% in the first quarter, compared with a 0.2% decline in the previous quarter. Imports vaulted 42.6% in the first quarter after ticking down 1.9% in the fourth quarter.
• April saw the federal budget register a surplus of $258.4 billion, slightly ahead of expectations and well above the surplus of $209.5 billion in April 2024. April receipts were $850.2 billion versus $776.2 billion a year ago. April outlays were $591.8 billion versus $566.7 billion a year ago. The deficit for the first seven months of fiscal year 2025, at $1,049 billion, is well above the $855.2 billion deficit over the first seven months of the previous fiscal year. Through the first seven months of fiscal year 2025, individual income tax receipts added up to $1,681 billion, while outlays for Social Security totaled $907.0 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable personal income each rose 0.8% in April after both increased 0.7% in March. Consumer spending increased 0.2% in April after increasing 0.7% the previous month. In April, the PCE price index and the PCE price index less food and energy (core prices) each ticked up 0.1% for the month. The PCE price index rose 2.1% since April 2024, while core prices increased 2.5% over the same period. In April, prices for both goods and services inched up 0.1%. Food prices decreased 0.3%, while energy prices rose 0.5%.
• The Consumer Price Index rose 0.2% in April after declining 0.1% in March. Over the 12 months ended in April, the CPI rose 2.3%, 0.1 percentage point below the rate for the 12 months ended in March. Core prices (excluding food and energy) inched up 0.2% last month and 2.8% since April 2024. Prices for shelter rose 0.3% in April, accounting for more than half of the total CPI monthly increase. Food prices decreased 0.1% last month after rising 0.4% in March. Energy prices rose 0.7% in April, despite a 0.1% decline in gasoline prices. Over the last 12 months ended in April, food prices increased 2.8%, energy prices declined 3.7%, and shelter prices rose 4.0%.
• Prices at the wholesale level declined 0.5% in April following a revised flat reading in March, according to the Producer Price Index. Producer prices increased 2.4% for the 12 months ended in April after rising 2.7% for the 12-month period ended in March. Excluding food and energy, producer prices fell 0.4% in April but increased 3.1% for the year. In April, prices for goods were unchanged from the previous month but rose 0.5% since April 2024. Last month saw prices for services fall 0.7% after a revised 0.4% increase in March. Prices for services have risen 3.3% for the 12 months ended in April, a decrease of 0.3 percentage point from the increase over the 12 months ended in March.
• Housing: Sales of existing homes decreased 0.5% in April and were 2.0% under the April 2024 figure. The median existing-home price was $414,000 in April, above the March estimate of $403,100 and 1.8% higher than the year-earlier price of $406,600. Unsold inventory of existing homes in April represented a 4.4-month supply at the current sales pace, marginally longer than the March supply of 4.0 months and well above the 3.5-month supply from a year ago. Sales of existing single-family homes fell 0.3% in April and were 1.4% below the estimate from a year earlier. The median existing single-family home price was $418,000 in April ($407,300 in March), and 1.7% above the April 2024 estimate of $411,100.
• New single-family home sales rose 10.9% in April and were 3.3% above the April 2024 figure. The median sales price of new single-family houses sold in April was $407,200 ($403,700 in March), down from the April 2024 estimate of $415,300. The April average sales price was $518,400 ($499,700 in March), up from the April 2024 average sales price of $500,600. Inventory of new single-family homes for sale in April represented a supply of 8.1 months at the current sales pace, down from the March estimate of 9.1 months but above the 7.7-month supply from a year earlier.
• Manufacturing: Industrial production was unchanged in April following a 0.3% decline in March. Manufacturing output decreased 0.4% last month after climbing 0.4% in March. In April, mining decreased 0.3%, while utilities rose 3.3%. Over the 12 months ended in April, total industrial production was 1.5% above its year-earlier reading. Since April 2024, manufacturing increased 1.2%, utilities rose 4.3%, while mining increased 0.7%.
• New orders for durable goods fell 6.3% in April following four consecutive monthly increases. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders decreased 7.5%. Transportation equipment, also down following four consecutive monthly increases, drove the April decline after decreasing 17.1%. For the 12 months ended in April, durable goods orders advanced 4.2%.
• Imports and exports: Import prices increased 0.1% in April following a 0.4% increase in March. Prices for imports increased 0.1% from April 2024 to April 2025. Import fuel prices decreased 2.6% in April and 12.0% over the past 12 months, which was the largest 12-month decline since the year ended October 2024. Export prices rose 0.1% in April for the second consecutive month. Export prices have not declined on a one-month basis since September 2024. Export prices advanced 2.0% for the 12 months ended in April 2025.
• The international trade in goods deficit in April was $87.6 billion, 46.0% less than the March estimate. Exports of goods for April were 3.4% above March exports. Imports of goods for April were 19.8% less than March imports. Over the 12 months ended in April, exports rose 9.6%, while imports increased 2.6%.
• The latest information on international trade in goods and services, released May 6, saw the goods and services deficit rise 14.0% in March to $140.5 billion. Exports of goods increased 2.0% to $278.5 billion in March. Imports of goods advanced 4.4% to $419.0 billion. For the 12 months ended in March 2025, the goods and services deficit increased $189.6 billion, or 92.6%, from the same period in 2024. Exports increased $41.1 billion, or 5.2%. Imports increased $230.7 billion, or 23.3%.
• International markets: Investors spent the month of May digesting plenty of economic data, particularly with respect to the impact of tariffs on international trade. German retail sales declined for the first time in four months after falling 1.1% in April. However, the German Consumer Price Index held steady at 2.1% in May. Despite the imposition of tariffs, inflation eased in Italy, Spain, and France, boosting expectations of an interest rate cut by the European Central Bank when it meets in early June. China’s first-quarter 2025 GDP grew 1.2%, down from a 1.6% increase in the fourth quarter. In addition, China’s consumer prices fell for the third straight month in April and were down 0.1% from April 2024. In May, the STOXX Europe 600 Index rose 2.3%; the United Kingdom’s FTSE gained 2.1%; Japan’s Nikkei 225 Index gained 3.1%; and China’s Shanghai Composite Index ticked up 2.1%.
• Consumer confidence: The Conference Board Consumer Confidence Index® rose by 12.3 points in May to 98.0. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased 4.8 points to 135.9. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, jumped 17.4 points to 72.8 but remained below the threshold of 80 that usually signals a recession ahead.

Eye on the Month Ahead

Most of the attention during June will be focused on President Trump’s tax and immigration legislation, as well as the impact of tariffs on worldwide trade.

The Markets (as of market close May 9, 2025)

Stocks closed mostly lower last week as investors looked ahead to trade negotiations between the United States and China over the weekend. Despite the announcement of a trade deal between the United States and the United Kingdom, investors remained unsure of the extent of that deal and, more particularly, whether any meaningful progress would be made with China. As has been the case over the last several weeks, the stock market was marked by volatility. Stocks began last week closing lower as President Trump threatened new tariffs, including a levy on foreign films. Crude oil prices dropped to their lowest level since the beginning of 2021 as OPEC+ agreed to increase production, raising fears of a global supply surplus. Wall Street saw a minimal reversal last Wednesday after the Federal Reserve decided to keep interest rates at their present level (see below). Thereafter, stocks moved up and down for the remainder of the week. Among the market sectors, consumer discretionary, industrials, and financials performed well, while health care, consumer staples, and communications services underperformed.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 5/9	Weekly Change	YTD Change
DJIA	42,544.22	41,317.43	41,249.38	-0.16%	-3.04%
NASDAQ	19,310.79	17,977.73	17,928.92	-0.27%	-7.16%
S&P 500	5,881.63	5,686.67	5,659.91	-0.47%	-3.77%
Russell 2000	2,230.16	2,020.74	2,023.07	0.12%	-9.29%
Global Dow	4,863.01	5,161.52	5,160.83	-0.01%	6.12%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.32%	4.37%	5 bps	-20 bps
US Dollar-DXY	108.44	100.03	100.39	0.36%	-7.42%
Crude Oil-CL=F	$71.76	$58.54	$61.00	4.20%	-14.99%
Gold-GC=F	$2,638.50	$3,247.90	$3,333.40	2.63%	26.34%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• As expected, the Federal Open Market Committee left the federal funds rate at its current range of 4.25%-4.50% following its meeting last week. While noting that economic activity has expanded at a solid pace and the unemployment rate has stabilized, the Committee warned that the risks of higher unemployment and higher inflation have risen. Furthermore, the FOMC statement indicated that uncertainty about the economic outlook has increased further. The Committee next meets in mid-June. Fed Chair Jerome Powell spoke after the meeting and ultimately suggested that the best course of action for the Committee is to wait for further clarity relative to the impact of the tariff policy on the economy and inflation.
• Growth in the services sector in April was the slowest in nearly a year and a half, according to the latest purchasing managers survey from S&P Global. Uncertainty over U.S. trade policies, especially regarding tariffs, was reported to have limited demand and weighed on business expectations, which slumped to the lowest level in two and a half years. Survey respondents indicated that tariffs have driven operating expenses higher through a rise in supplier charges, which caused service providers to increase their selling prices.
• According to the latest report from the Bureau of Economic Analysis, the goods and services deficit was $140.5 billion in March, an increase of 14.0% from the February estimate. Exports rose 0.2% to $278.5 billion, while imports advanced 4.4% to $419.0 billion. Year to date, the goods and services deficit increased $189.6 billion, or 92.6%, from the same period in 2024. Exports increased $41.1 billion, or 5.2%. Imports increased $230.7 billion, or 23.3%.
• The national average retail price for regular gasoline was $3.147 per gallon on May 5, $0.014 per gallon above the prior week’s price but $0.496 per gallon less than a year ago. Also, as of May 5, the East Coast price ticked up $0.011 to $2.998 per gallon; the Midwest price increased $0.035 to $3.027 per gallon; the Gulf Coast price rose $0.036 to $2.722 per gallon; the Rocky Mountain price decreased $0.016 to $3.118 per gallon; and the West Coast price declined $0.036 to $4.156 per gallon.
• For the week ended May 3, there were 228,000 new claims for unemployment insurance, a decrease of 13,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 26 was 1.2%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 26 was 1,879,000, a decrease of 29,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended April 19 were New Jersey (2.5%), Rhode Island (2.5%), California (2.3%), Washington (2.1%), District of Columbia (1.8%), Illinois (1.8%), Massachusetts (1.8%), New York (1.8%), Puerto Rico (1.8%), Minnesota (1.7%), and Nevada (1.7%). The largest increases in initial claims for unemployment insurance for the week ended April 26 were in New York (+15,418), Massachusetts (+3,301), Georgia (+1,207), Puerto Rico (+1,012), and Nebraska (+570), while the largest decreases were in Connecticut (-2,340), Rhode Island (-1,850), Missouri (-1,696), Michigan (-1,436), and Washington (-700).

Eye on the Week Ahead

Inflation data for April is available this week, with the releases of several important reports. Both the Consumer Price Index and the Producer Price Index are out this week. In March, the CPI fell 0.1%, while the PPI dropped 0.4%. It will be interesting to see if tariffs have any impact on those readings for April.

The Markets (as of market close April 4, 2025)

Wall Street endured its worst week since the Covid crisis as investors shunned risk in response to inflation and recession fears following President Trump’s sweeping tariffs and China’s immediate retaliatory response. Despite a better-than-expected jobs report, comments made last Friday by Federal Reserve Chair Jerome Powell who indicated that the economy was in a good place, but the current economic policy raised the risk of higher unemployment and inflation. The downturn in equities was spread among most of the market sectors with the exception of utilities. Consumer discretionary, industrials, communication services, financials, and energy were hit the hardest. Stocks began last week by moving higher on both Monday, Tuesday, and Wednesday, ahead of President Trump’s tariff announcement. However, the fallout from the more aggressive-than-expected tariff plan was significant last Thursday and Friday. Bond prices rose higher with increased demand, dragging yields on 10-year Treasuries to a nearly six-month low. Crude oil prices dropped to their lowest value since August 2021 as mounting fears over a global economic slowdown raised the prospects of weakening oil demand.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 4/4	Weekly Change	YTD Change
DJIA	42,544.22	41,583.90	38,314.86	-7.86%	-9.94%
NASDAQ	19,310.79	17,322.99	15,587.79	-10.02%	-19.28%
S&P 500	5,881.63	5,580.94	5,074.08	-9.08%	-13.73%
Russell 2000	2,230.16	2,023.27	1,827.03	-9.70%	-18.08%
Global Dow	4,863.01	5,135.73	4,685.08	-8.77%	-3.66%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.25%	3.98%	-27 bps	-59 bps
US Dollar-DXY	108.44	103.96	103.12	-0.81%	-4.91%
Crude Oil-CL=F	$71.76	$69.14	$62.59	-9.47%	-12.78%
Gold-GC=F	$2,638.50	$3,116.50	$3,058.70	-1.85%	15.93%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• March saw employment rise by a better-than-expected 228,000. February’s total was revised down from 151,000 to 117,000, and the January total was lowered by 14,000. With these revisions, employment for January and February combined was 48,000 lower than previously reported. Last month, the total number of employed was 164.0 million, an increase of 201,000 over the February total. In March, the total number of unemployed, at 7.1 million, was virtually unchanged from the prior month. The unemployment rate ticked up 0.1 percentage point to 4.2% in March. The unemployment rate has remained in a narrow range of 4.0% to 4.2% since May 2024. In March, the labor force participation rate ticked up 0.1 percentage point to 62.5%, while the employment-population ratio, at 59.9%, was unchanged from the prior month. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.5 million, changed little in March. The long-term unemployed accounted for 21.3% of all unemployed people. In March, average hourly earnings rose by $0.09, or 0.3%, to $36.00. Over the past 12 months, average hourly earnings have increased by 3.8%. In March, the average workweek was unchanged at 34.2 hours.
• The manufacturing sector retreated somewhat in March after a strong finish in February. The reduction in factory output was due, in part, to a slowdown in new orders. New hires stalled after four straight months of gains. The drop in production was the first since December 2024. Cost pressures intensified, largely due to the impact of tariffs, with input price inflation rising to its highest level in over two years.
• Business in the services sector expanded in March, despite operating expenses increasing at an 18-month high. New business rose on the heels of increased customer demand.
• The number of job openings ticked down in February, according to the latest Job Openings and Labor Turnover Summary. At 7.6 million, job openings fell by 194,000 in February from January, while the number of hires was little changed at 5.4 million. The number of total separations, at 5.3 million, was also little changed from the prior month.
• The latest data on the international trade deficit was released on March 6 and was for January. At that time, the international trade in goods and services deficit was $131.4 billion, 34.0% above the December estimate and 96.5% higher than the January 2024 deficit. In January, exports were $3.3 billion, or 1.2% above the December figure. Imports were $36.6 billion, or 10.0% higher than December imports. Since January 2024, exports increased 4.1% and imports advanced 23.1%.
• The national average retail price for regular gasoline was $3.162 per gallon on March 31, $0.047 per gallon above the prior week’s price but $0.355 per gallon less than a year ago. Also, as of March 31, the East Coast price ticked up $0.031 to $2.992 per gallon; the Midwest price increased $0.054 to $3.074 per gallon; the Gulf Coast price dipped $0.010 to $2.730 per gallon; the Rocky Mountain price increased $0.068 to $3.111 per gallon; and the West Coast price rose $0.126 to $4.181 per gallon.
• For the week ended March 29, there were 219,000 new claims for unemployment insurance, a decrease of 6,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended March 22 was 1.3%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended March 22 was 1,903,000, an increase of 56,000 from the previous week’s level, which was revised down by 9,000. This is the highest level for insured unemployment since November 13, 2021, when it was 1,970,000. States and territories with the highest insured unemployment rates for the week ended March 15 were Rhode Island (2.8%), New Jersey (2.7%), California (2.4%), Minnesota (2.4%), Massachusetts (2.3%), Washington (2.3%), Illinois (2.2%), District of Columbia (2.0%), Montana (1.9%), and New York (1.9%). The largest increases in initial claims for unemployment insurance for the week ended March 22 were in Kentucky (+915), Oregon (+577), New York (+544), Tennessee (+429), and Missouri (+392), while the largest decreases were in Michigan (-4,040), California (-1,826), Texas (-1,774), Mississippi (-1,764), and Pennsylvania (-565).

Eye on the Week Ahead

March inflation data is available this week with the release of the Consumer Price Index. February saw consumer prices tick up 0.2% for the month and 2.8% over the last 12 months.