US Stocks ended the week modestly lower due to slower growth. Treasury bonds gained as yields fell. Commodities were generally lower and the dollar rose. While the number of new jobs added fell to 160,000 in April it is still above the 145,000 figure quoted by a Wall Street Journal survey of economists as needed to cover the growth in the workforce.
In economic news this week:
- The Institute for Supply Management reported:
- Its manufacturing purchasing manager’s index fell from 51.8 to 50.8 in April. Anything over 50 represents expansion just at a slower rate of acceleration. Most of the deceleration was due to contraction in oil and coal production.
- Its non-manufacturing (services) purchasing manager’s index rose from 54.5 to 55.7 indicating faster growth in the services sector.
- The Labor department reported:
- Productivity fell at a seasonally adjusted annual rate of 1.0% in the first quarter. From a year ago productivity has risen 0.6%.
- Wages in the first quarter grew at a 3.0% annual pace.
- Unit labor costs rose at a 4.1% annual pace.
- First time claims for unemployment rose 17,000 in the prior week to 274,000. The four week moving average of claims rose 2,000 to 258,000. This represents the 61st consecutive week with claims below 300,000.
- Non-farm payrolls increased 160,000 in April, less than expected. The unemployment rate stayed at 5.0%. February and March payrolls were revised down and the average payroll gain for the first four months averaged 192,000.
- The average workweek expanded 0.1 hours to 34.5 hours.
- The Commerce Department reported that construction spending rose 0.3% in April. March’s construction spending was revised from a decline to a 1.0% gain.
- The U.S. Energy Information Administration reported
- Crude oil inventories rose by 2.8 million barrels
- Gasoline stockpiles rose 536,000 barrels.
- The combined stockpile of crude oil and refined products hit an all-time high of 1.37 billion barrels.
- The China Caixin services purchasing manager’s index fell from 52.2 in March to 51.8 in April. Because this is over 50 this represents expansion but at a slower rate.
- The China Caixin manufacturing purchasing manager’s index fell from 49.7 in March to 49.4 in April. Because this is less than 50 this represents contraction at an accelerating rate. This also is the 14th consecutive month of contraction.
- Factset reported that with 87% of S&P 500 companies reporting earnings have declined 7.1% in the first quarter.
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Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
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These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Indices mentioned are unmanaged and cannot be invested into directly.