The Dow Jones Industrial Average finished the May 8 week up 0.91% adding to gains for the month. In May the DJIA is up 1.97%. The Bureau of Labor Statistics’ April jobs report led U.S. markets higher for the week and month after a strong report was released on Friday, May 8.
The April Employment Situation report showed an increase of 223,000 jobs which helped lower the unemployment rate from 5.5% to 5.4%. At 223,000 the month’s increase was in line with economists’ consensus of 220,000. While the headline numbers were good for the month a disappointing downward revision for March was included. March’s increase of 126,000 jobs was decreased to a total of 85,000.
Despite the downward revision, the April employment report data appears to be good for the Federal Reserve as many continue to see its target for a rate increase in September. Other factors considered by the Federal Reserve also continue to remain under close scrutiny.
The Commerce Department’s most recent inflation report showed inflation at a bleak 0.3% for the one-year period through March. Energy prices and the stronger dollar continue to take a toll as the inflation rate excluding food and energy for the same 12-month period through March was 1.3%.
Gross domestic product which gauges the economy’s overall growth appears to have stagnated according to the first quarter’s report. The first estimate of GDP released on April 29 showed first quarter GDP increasing at an annual rate of 0.2% following a fourth quarter reading of 2.2%.
A few final companies in the DJIA are still left to report first quarter earnings including Cisco (CSCO, Financial) which will report earnings this week on Wednesday, May 13. Other potential factors affecting the U.S. economy’s outlook in the week ahead include retail sales reported on Wednesday and industrial production reported on Friday.
