10 Things You Need to Know: May 6, 2025
Key data releases this week include: ISM Services Index (Mon), trade balance (Tue), FOMC rate decision (Wed), consumer credit (Wed), and nonfarm productivity (Thu).
Haver
April 29, 2025
U.S. house prices edged up 0.1% m/m in February after a rise of 0.3% in January, according to the Federal Housing Finance Agency (FHFA) House Price Index. The year-on-year rate of increase decelerated to 3.9% in February, the lowest since June 2023.
Haver
April 29, 2025
Job openings fell 288,000 to 7.192 million in March from 7.480 million in February. This is the lowest level of openings since last September although openings have been relatively trendless for the past year. The number of openings continues to exceed the number unemployed, but by only 109,000, the smallest amount since the pandemic, and indicates a relatively balanced labor market.
Haver
April 30, 2025
Real GDP eased by a 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. Foreign trade subtracted 4.83 percentage points from growth. Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1.
Reuters
April 30, 2025
Consumer spending surged 0.7% last month after a 0.5% gain in February. Economists polled by Reuters had forecasted consumer spending would rise 0.5%. The Personal Consumption Expenditures (PCE) Price Index was unchanged in March. In the 12 months through March, PCE prices increased 2.3%. Stripping out the volatile food and energy components, the PCE price index was also unchanged. In the 12 months through March, core inflation increased 2.6%.
Haver
May 2, 2025
Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March and 102,000 in February. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The unemployment rate, measured in the household survey, held m/m at an expected 4.2%.
Euronews
May 1, 2025
The European Union has offered to increase purchases of US goods by €50 billion to address trade imbalances, according to EU Trade Commissioner Maros Sefcovic. However, Sefcovic said the EU will not accept the US maintaining a 10% tariff on EU goods, labeling it as unfair.
South China Morning Post (Hong Kong), The New York Times
May 2, 2025
China has signaled a potential thaw in the ongoing tariff war with the US, saying it’s evaluating Washington’s outreach for talks while urging sincerity from the Trump administration. Markets responded positively, though China warned negotiations hinge on the US rolling back unilateral tariff hikes.
Capital Economics
April 30, 2025
A contraction in GDP and near-flatlining in core PCE prices would usually be more than enough to persuade policymakers at the Fed to cut interest rates. Since those data preceded the implementation of tariffs at the start of April, however, there remains far too much uncertainty for the Fed to adjust policy at this week’s meeting. We continue to expect a tariff-induced rebound in goods prices to keep the Fed on the sidelines this year.
Bloomberg
May 1, 2025
Treasury Secretary Scott Bessent said that the US Treasury market is telegraphing that the Federal Reserve ought to lower interest rates. “We are seeing that two-year rates are now below fed funds rates. So that’s a market signal that they think the Fed should be cutting,” Bessent said. Former Treasury Secretary Lawrence Summers said that it would be a “very serious error” for policymakers to ease at their upcoming meeting.