Weekly Market Commentary May 5, 2025

Last week brought a series of economic indicators that painted a cautious picture of the current economic landscape. On Monday, the Conference Board reported a notable drop in the Consumer Confidence Index for April, which fell by 7.9 points to 86.0 — the lowest level since May 2020. This marked the fifth consecutive monthly decline, underscoring mounting pessimism about future business conditions, employment prospects, and income levels. Also on Monday, the Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS) for March, showing job openings held steady at 7.2 million but were down by 901,000 from a year earlier. The stability in job openings and hires, coupled with an unchanged quit rate, pointed to a cooling labor market and heightened caution among workers.

On Tuesday, the Bureau of Economic Analysis published its advance estimate for first-quarter 2025 GDP, which signaled a contraction at an annualized rate of 0.3%. This decline was largely driven by a surge in imports and reduced government spending, reflecting softer consumer demand and tighter fiscal policy. Meanwhile, the Personal Consumption Expenditures (PCE) price index rose by 3.6% in the first quarter, up from 2.4% in the prior quarter, highlighting renewed inflationary pressures and further clouding the economic outlook.

By Thursday, the BLS reported that nonfarm payroll employment had increased by 177,000 jobs in April, while the unemployment rate held steady at 4.2%. In the markets, a generally bullish tone prevailed, buoyed by tentative signs of easing tariff tensions and optimism about potential progress in trade negotiations.

Taken together, these indicators suggest a U.S. economy facing headwinds from both softening consumer sentiment and persistent inflation, with the labor market showing early signs of moderation.

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