Making Sense: In Brief
The week ahead for markets and the economy
Monday, June 2, 2025
Blake: Last week, markets witnessed big swings in US trade policy as the White House called off 50% levies on imports from Europe and federal courts paused, and then reinstated, the administration's steep tariffs on imports from most foreign trading partners.
This first week of June will provide several data points that will inform our market and economic outlooks.
This morning, we'll see the latest print of the ISM manufacturing index for May. Another reading above 50 would suggest that US factory activity is still expanding. On Wednesday, we'll see the sister ISM index for the services sector, which forecasters also expect will show modest expansion.
Analysts will also pay attention in these reports to the sub-index for the prices paid component, where respondents will indicate the extent to which they're paying more for input costs.
This afternoon, Federal Reserve Chairman Powell will give remarks at a Fed conference in Washington, DC. Several other Fed officials will be speaking throughout the week—right ahead of their communications blackout period before the June FOMC interest rate meeting—but markets solidly expect the Fed to remain on hold for the time being, at least until the economic picture seems clearer.
With it being the first week of the month, there's a slew of important labor market data coming out this week. We'll see the number of new job openings tomorrow and layoffs in the JOLTS survey. And then on Thursday, we'll see an estimate of job cuts in a private sector survey called Challenger, Gray and Christmas.
Then on Friday, we'll see the all-important jobs report for May. Forecasters expect hiring was still firm last month and that the unemployment rate stayed at a low 4.2%.
Markets will watch closely for any sign of weakening or distress in the labor market data as anecdotes about economic uncertainty have been piling up for weeks now.
So things to watch this week. One, the ISM manufacturing and service indices today and Wednesday. Two, Fed Chair Powell's remarks this afternoon. And three, labor market data throughout the week, with the May jobs report coming on Friday.
Authors
Brent Ciliano CFA | SVP, Chief Investment Officer
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Brent.Ciliano@FirstCitizens.com | 919-716-2650
Phillip Neuhart | SVP, Director of Market & Economic Research
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Phillip.Neuhart@FirstCitizens.com | 919-716-2403
Blake Taylor | VP, Market & Economic Research Analyst
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Blake.Taylor@FirstCitizens.com | 919-716-7964
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