The Profit Margin: June 9, 2025
Statistic of the Week
The ambiguity surrounding tariff policies is leading to uncertainty regarding the prices of imported products. The U.S. is significantly dependent on specific trading partners for certain commodities or finished goods. For instance, 99% of calcium phosphates are imported from Peru, while 98% of chromium ore is sourced from South Africa. Additionally, China provides 97% of the baby strollers used in the U.S., Portugal accounts for 93% of cork imports, and Madagascar is responsible for 80% of the vanilla brought into the country.
Global Perspective
The Organization of the Petroleum Exporting Countries (OPEC) declared an increase in oil production by 411,000 barrels per day, effective in July. This decision comes as the cartel and its partners are reversing a previous effort to elevate oil prices. Since the beginning of 2025, oil prices have decreased by approximately 13%.
Market Moving Events
Tuesday: NFIB Optimism Index
Wednesday: CPI, Federal Budget
Thursday: Jobless Claims, PPI
Friday: Consumer Sentiment
Commentary
Domestic equity markets marched higher last week as investors looked for a silver lining in a mediocre jobs report. Both the DJIA and Nasdaq flipped from negative to positive year-to-date performance.1 Of the major averages, the Nasdaq was the week’s leader; it rallied 2.18%.2 The S&P 500, which finished just above the 6,000 level for the first time since February,3 rose 1.50%,4 and the DJIA increased 1.17%.5 Fixed income yields ticked up. The 10-year Treasury finished Friday with a yield of 4.51%, up 0.10% from the week prior.6
From a headline perspective, the employment figures last week were “good enough.” While the ADP report disappointed to the downside, the nonfarm payrolls report surprised slightly to the upside. 139,000 jobs were added versus the 126,000 expected.7 However, the figures for March and April were revised down by 95,000 jobs.8 Wage growth is firm. The unemployment rate (chart below) remained the same. But, initial jobless claims have been trending higher. The most recent reading of 247,000 is elevated. And notably, 625,000 individuals left the workforce in May.9 (Those individuals leaving most likely allowed the unemployment rate to remain unchanged instead of ticking up). All that said – the labor market looks good – not great.
This week, most eyes will be focused on the CPI and PPI inflation reports. Analysts expect that the core inflation rate rose 0.3% in May and 2.9% year-over-year.10 These are the first inflation readings with some effect of the tariffs. The full effect will occur later in the year.
Chart of the Week
The unemployment rate remained unchanged for May, aligning with analysts’ predictions. The widely monitored U-3 unemployment rate stood at 4.2%.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
Bureau of Economic Analysis
Statistic of the Week:
The New York Times
Global Perspective:
The Economist
Commentary:
1. Bloomberg
2. Bloomberg
3. Investor’s Business Daily
4. Bloomberg
5. Bloomberg
6. MarketWatch.com
7. Investor’s Business Daily, Bureau of Labor Statistics
8. Investor’s Business Daily
9. Barron’s
10. MarketWatch.com