The past trading week (KW 23-2025) was marked by a robust US labor market report, which brought relief to the markets despite previously weaker economic data, boosting stock prices. Here is a detailed weekly recap:
Labor Market: Stability Despite Challenges
- Unemployment Rate Stable: The US unemployment rate remained unchanged at 4.2% in May – the third consecutive month at this level. The number of unemployed people was about 7.2 million and changed little from the previous month.
- Moderate Employment Growth: Total non-farm employment rose by 139,000 jobs. Particularly strong growth was seen in the healthcare, leisure & hospitality, and social services sectors. Jobs were cut in the federal government sector.
- Demographic Differences: Unemployment remained largely stable among adults (men and women each at 3.9%), teenagers (13.4%), Whites (3.8%), Blacks (6.0%), Asians (3.6%), and Hispanics (5.1%).
Backgrounds and Influencing Factors
- Decrease in Immigration: The growth of the labor force is slowing due to lower immigration. This reduces the need for employment growth to keep unemployment stable.
- Corrections to Previous Data: The Bureau of Labor Statistics revised minor errors from the April data downwards in the May report; however, key metrics like the unemployment rate were not affected.
- Weak Inflation Signals: Average hourly wages stagnated – a sign that there are few indications of rising inflation. This reassures markets regarding potential interest rate hikes by the Fed.
Market Reactions
- Wall Street Breaths Easy: After a series of weaker economic data, the robust labor market report was received with relief. Stocks were in demand; losses were offset or even turned into gains.
- Currency Markets React Cautiously: The Euro rose slightly to about 1.11; European indices like the DAX showed little change in response to the US data.
Conclusion
The US labor market continues to demonstrate resilience against economic uncertainties such as trade conflicts or global tensions. Despite moderate employment growth, the labor market situation remains stable – which reassures both investors and decision-makers, setting positive impulses for financial markets.
“Labor force growth will also be slower in 2025 due to lower immigration…”
— Bill Adams of Comerica Bank on current developments in the US labor market
This stability ensures that even in the face of global challenges, confidence in the American economic engine remains intact – a clear plus for rallies in stock markets worldwide!