Economic data is slow, and getting to the truth of the problem can take time.
This week will offer some clearer pictures of how the economy is coping (or not) with rising tariffs and related stress, the slowdown in real estate activity and possible retail softness, and if reports of layoffs around the country are indicative of a major slowdown.
The data so far have suggested the U.S. economic picture is stable. But if a trade war erupts, the economy could deteriorate, with effects unfolding — slowly at first — spreading out from the west and east coasts.
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Ports, especially the ports of Los Angeles and Long Beach are already seeing depressed activity. And other realities can’t be ignored. Las Vegas is seeing fewer foreign visitors than a year ago.
Most investors will try to annoy the issues until they can’t.
Here’s a run-down of this week’s economic reports, some of which are among the most closely scrutinized.
Purchasing managers indexes
What makes these indexes important is they offer a view of the volume of goods and services that businesses and others are buying. These are among the few forward-looking economic reports.
Monday, at mid-morning, brings reports on manufacturing in May from Standard & Poor’s Global and the Institute for Supply Management. If the reports say their indexes are under 50, that’s a signal that manufacturing activity is starting to decline. Above 50 is expansion.
Wednesday, both organizations report on services that people, businesses or organizations buy. Again, above 50 means in economic growth. Under 50 means decline.
In April, ISM reported declines in manufacturing, while S&P showed manufacturing growth was slowing. Tariff concerns were a constant theme in all four April reports. But they didn’t suggest massive job cuts.
Both organizations showed services activity expanded in April.
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Construction spending
Due Monday at 10 a.m. ET. This picks up construction of everything from homes and apartments to airports with an April time-frame.
The report for March showed a 0.5% decline from February
New-home construction has been off this year, pending home sales have been weak, and many cities are coping with surpluses of commercial property.
Factory orders for May
Due Tuesday at 10 a.m. The May report from the Commerce Department should show some slight gains in April. The month-before report showed order gains for January, February and March.
But shipments were down slightly.
Job openings and labor turnover for April
Due Tuesday at 10 a.m. This report estimates the number of job openings in the country and how it compares. The picture so far has portrayed employment stability because employers are struggling to find and hold on to workers, and layoffs have been fairly modest.
The technology industry, including Microsoft (MSFT) , Amazon.com AMZN, and Facebook-parent Meta Platforms (META) , has been trimming staffs, however.
And bankruptcy filings, particularly of retailers, restaurants and bars, have produced a steady stream of lost jobs.
Plus, the Trump Administration has been cutting federal payrolls.
In March, there were 7.2 million jobs available. Hires held at 5.4 million, and separations were little changed at 5.1 million.
Houses under construction in an Austin, Texas, neighborhood.
ADP employment
Due Wednesday at 8:15. This is a look at the national private-sector jobs market from ADP, a giant in payroll processing. In April, jobs grew by an estimated 62,000. The estimate for May is 100,000+.
Beige Book report
Due Wednesday at 2 p.m. ET. Compiled by staffs at the 12 Federal Reserve banks, this is a narrative report on business conditions across the country. Data is soft, but the on-the-ground perspective is useful.
Weekly report on jobless claims
Due Thursday at 8:30 a.m. Last week’s report showed a gain of 14,000, but most of the gains reported were related to end of school-year and Memorial Day, MarketWatch reported. A big jump will get people’s attentions.
Jobs report
Due Friday at 8:30 a.m. This is the biggest economic report of any month.
This report uses data collected up to mid-May, and economists forecast an increase of 130,000 in nonfarm jobs after a gain of 177,000 in April.
The unemployment rate is expected to remain unchanged at 4.2%.
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The monthly estimate of job gains have declined from as many as 626,000 in July 2022 to barely 100,000 a month since the beginning of 2024, according to the Bureau of Labor Statistics.
The worst month in the last 10 years: April 2020, when 20.5 million workers were laid off because of the Covid-19 pandemic.
All of those jobs plus an additional 9 million — more than 29 million jobs total — have been added back into the economy since that 2020 low.
The BLS numbers have become volatile in recent years, and revisions from prior months can be big — up or down.
One reason is the estimates depend on a select set of employers and others to fill out monthly surveys. And it’s become more difficult to get enough responses.
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