Search
integrated planning for life
 
integrated interior banner

06/06/2018
Market Update

Contact Our Team

The U.S. economy added 223,000 jobs in May, beating economists’ expectations and exceeding the previous month’s gain. The unemployment rate dropped to 3.8%, the lowest level since April 2000. Hourly wage growth improved by 2.7% year over year. According to economists, the strong jobs report should keep the Federal Reserve (Fed) on target for a rate hike in June and will likely increase the number of forecasted hikes before year-end.
This Week

  • The U.S. economy added 223,000 jobs in May, beating economists’ expectations and exceeding the previous month’s gain. The unemployment rate dropped to 3.8%, the lowest level since April 2000. Hourly wage growth improved by 2.7% year over year. According to economists, the strong jobs report should keep the Federal Reserve (Fed) on target for a rate hike in June and will likely increase the number of forecasted hikes before year-end.
  • President Donald Trump proposed sharp tariffs on steel and aluminum from Canada, Mexico and the European Union. The trade levies (25% on imported steel and 10% on imported aluminum) heighten the risk of retaliatory tariffs on U.S. products by some of the country’s largest trading partners.
  • First-quarter gross domestic product (GDP) was revised lower in the second estimate, from 2.3% to 2.2% annualized growth. Consumer spending increased by just 1.0%—the slowest pace in five years. Analysts believe the economy remains on track to hit 3% annual growth in 2018, driven by tax reform and increased government spending.
  • The trade deficit tightened slightly in April to $68.2 billion. (Smaller trade deficits support GDP growth). Exports dropped by 0.5% on weakness in vehicles and capital goods; imports also fell by 0.5%, primarily within consumer goods.
  • The latest Fed Beige Book focused on modest wage gains and a moderate economic expansion, which continues to support the case for a rate hike at the central bank’s June meeting; it also concentrated on tariff-impacted steel prices.
  • Initial jobless claims fell by 3,000 to 221,000 in the week ending May 26. The less-volatile four-week moving average grew by 2,500 to 222,250. Continuing claims decreased by 16,000 to 1.73 million in the week ending May 19 and remained near a 45-year low. Economists remained confident that the job market was nearly (if not completely) at full employment.
  • Personal income expanded by 0.3% in April, with wages and salaries rising by 0.4%. Consumer spending advanced by 0.6% for the month. The core personal consumption expenditures reading (the Fed’s preferred measure of inflation) inched 0.2% higher for the month and jumped by 1.8% year over year.
  • The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) expanded at a faster pace in May compared to the prior month. A similar report by Markit Economics, however, showed that manufacturing decelerated from April’s three-year high. Both reports indicated inflationary pressures tied to the recent tariffs imposed on steel imports.
  • China’s manufacturing sector continued to advance for the twelfth consecutive month in May; strength in output and new orders slightly offset a dip in employment.
  • Japanese manufacturing activity remained in expansion territory despite slowing in May, as increased demand in new export orders mitigated slackening growth in new orders.


 

RubinBrown Wealth Advisors help clients identify, prioritize and achieve their financial goals and objectives utilizing an experienced group of professionals that can integrate income taxes, estate taxes, financial planning, risk management and investment management needs, all in one place, throughout their lifetimes.

 

RubinBrown Advisors may only transact business in any state if we are first registered, excluded or exempted from the applicable registration requirements. Follow-up, individual responses or rendering of personalized investment advice for compensation will not be made absent compliance with applicable state registration requirements or an applicable exemption or exclusion.

All Market Updates