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The May Jobs Report Lets the Fed Stay on Hold for the Summer
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The U.S. economy, which weathered false recession alarms in 2023 and 2024, is entering another uncomfortable summer.
For the Federal Reserve, the May jobs report will do nothing to change its wait-and-see stance, as it spends the summer observing how trade-policy changes influence businesses' pricing and hiring decisions.
The main focus this week is on trade talks between the U.S. and China in London. American negotiators are set to press Xi Jinping’s representatives to speed up exports of rare-earth minerals and magnets.
Wall Street’s worst fears about the trade war—that escalating tariffs could sink the global economy—have receded. But anxieties about inflation remain.
U.S. inflation data for May, due on Wednesday, will be watched closely as investors look for any signs of tariffs feeding through into prices ahead of a decision by the Fed later this month.
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The U.S. Economy Is Headed Toward an Uncomfortable Summer
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Photo: David Dermer/Associated Press
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Job growth held steady in May, with the economy adding 139,000 jobs. The unemployment rate has stayed in a tight range, between 4% and 4.2%, over the past year.
But there are cracks beneath the surface. Businesses are warning that constantly shifting trade policies are interfering with their ability to plan for the future, leading to hiring and investment freezes.
Policy uncertainty has unfolded against the backdrop of an economy with slower job growth and a cooling housing market. Compared with last year, the Federal Reserve is more reluctant to cut interest rates because officials are worried about new inflation risks.
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Get Ready for Inflation to Matter in Markets Again
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Price pressures subsided as a driver of markets when inflation cooled from the red-hot levels of recent years. But with traders and money managers racing to gauge how President Trump’s trade war is affecting businesses and households, this coming week’s readings on consumer and producer prices could spark a new round of market turbulence.
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China’s Exports to U.S. Suffer Biggest Decline Since 2020
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A U.S.-China trade truce wasn’t enough to stem a sharp drop in shipments from China to America last month, a sign of the havoc that President Trump’s tariffs have wrought on trade between the world’s two largest economies.
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Russia’s Central Bank Cuts Key Rate Despite High Inflation
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Russia’s central bank on Friday lowered its key interest rate for the first time since late 2022 despite an inflation rate that remains well above target.
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Hiring Slowed in May, With 139,000 New Jobs
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U.S. job growth slowed slightly last month, a sign employers remained cautious about hiring amid uncertainty over tariffs and the nation’s economic outlook. The U.S. added 139,000 jobs in May, the Labor Department reported Friday.
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Will America’s Unbalanced Trade Doom the Dollar?
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The Trump administration and Wall Street haven’t exactly seen eye to eye, but they are starting to agree on one thing: America’s trade deficits are a problem and the dollar might not stabilize until imports and exports realign. But in reality, it is more likely that the currency’s fate depends on the success of the “Magnificent Seven” stocks, writes WSJ's Jon Sindreu.
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Americans’ Electric Bills Are Headed Higher With the Temperatures
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Americans can expect to pay more to stay cool this summer thanks to forecasts for above-average temperatures across the country and natural-gas prices that are heading into air-conditioning season 37% higher than last year.
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Moody’s Chief Economist on Recession Fears and How Politics Shapes the Economy
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Mark Zandi, chief economist of Moody’s Analytics, gives his take on all the policy balls in the air and how where they land will affect the economy.
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Businesses Are Bingeing on Crypto, Dialing Up the Market’s Risks
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Buying bitcoin is becoming a fad for a growing list of companies that have nothing to do with crypto but believe digital assets can boost their stocks.
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Switzerland Puts Tough Banking Curbs on UBS
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Switzerland proposed some of the toughest capital rules in the world on banking giant UBS, an effort to prevent another Credit Suisse-style meltdown, protect taxpayers and restore the country’s reputation as a haven for rich people.
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10 a.m.: Monthly Wholesale Trade
10 a.m.: Employment Trends Index
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6 a.m.: NFIB Index of Small Business Optimism
9 a.m.: Johnson Redbook Retail Sales Index
10 a.m.: Quarterly Financial Report, Industry
10 a.m.: Quarterly Financial Report, Retail
11:30 a.m.: Economic Club of New York event with U.S. Trade Representative Jamieson Greer
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Jobs Report Prompts Trump's Latest Attack on Powell
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The Labor Department's May jobs report was solid, yet still gave President Trump cause to go after Fed Chair Jerome Powell to lower interest rates, a recurring recent theme. "'Too Late' at the Fed is a disaster!" Trump wrote on social media, referring to his own Fed chair appointee by a nickname. "If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due," Trump added. In fact, long-term interest rates rose late last year as the Fed cut rates, because they are largely shaped not by immediate Fed actions but by how investors expect the Fed will move in the future. — Matt Grossman
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U.S. steelmaker shares soared on news of President Trump’s new tariffs. But are these tariffs as bulletproof as investors seem to believe?
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European leaders rattled by President Trump’s tariffs, tongue-lashings and threats to seize Greenland are now getting their heads around the latest twist from the White House: praise.
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Ireland’s manufacturing output fell sharply in April, a new sign that the eurozone economy is slowing after a strong start to the year as U.S. businesses stockpiled goods ahead of expected tariff increases.
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The Japanese economy shrank less than initially estimated in the first quarter but remains at risk of technical recession, which could delay the Bank of Japan’s timeline for raising interest rates.
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Taiwan’s exports resilience was on full display in May, growing at the fastest pace in nearly 15 years on likely frontloading as tariff uncertainty continues.
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China’s foreign-exchange reserves increased slightly in May, as the Chinese yuan strengthened on a temporary tariff truce with the U.S. and Beijing’s recent stimulus measures
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WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.
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