“The market doesn’t reward the smartest traders. It rewards the most disciplined ones.” — Igor Arapov

1. US Inflation Accelerates as Gas, Rent and Food Prices Climb — The consumer price index rose 3.8% from a year earlier, according to Bureau of Labor Statistics data out Tuesday, the most since 2023. After adjusting for inflation, wages fell for the first time in three years. The figures show how the impact of the Iran war is hitting the US economy as energy costs surge. The BLS report indicated gas prices rose almost 28% over the past two months. Grocery prices, rents and airfares also saw large increases from a month earlier. A sustained pickup, especially in the cost of essentials, could lead consumers to cut back on spending. The overall CPI advanced 0.6% in April. Grocery prices rose 0.7%, the most in almost four years. Meats, dairy, fresh fruits and vegetables all posted notable gains. Food prices have been a major contributor to affordability concerns in recent years and could play into Americans’ views of the economy heading into midterm elections.
2. US Producer Prices Rise Most Since 2022 on Energy Costs — The producer price index rose 6% from a year ago, according to Bureau of Labor Statistics data out Wednesday. That topped all estimates in a Bloomberg survey of economists. The monthly gain was also the sharpest since 2022. A core measure of wholesale inflation that excludes food and energy increased 5.2% from April 2025 — the biggest advance in more than three years. The PPI data likely reinforce Federal Reserve officials’ views that inflation should remain their top concern in the face of the war-driven surge in oil prices that’s starting to ripple through to other parts of the economy.
3. Xi’s Taiwan Warning to Trump Highlights Tensions in Beijing Summit — Xi’s remarks, while in line with China’s longstanding position, threatened to dim the mood of a visit both countries hoped would stabilize ties. The meetings that began Thursday morning at the Great Hall of the People in Beijing were billed as a gathering of superpowers to quell economic and trade disputes.

Those topics were indeed raised, including discussions of trade ties, U.S. access to the Chinese market, Beijing’s investment in U.S. industries and its purchases of American agricultural products.

The week ahead — Economic data from Econoday.com:

“If you can learn to create a state of mind that is not affected by the market’s behavior, the struggle will cease to exist.” — Mark Douglas

1. Private Employers Add 109,000 Jobs in April, the Fastest Pace of Job Growth Since January 2025 — The U.S. added 109,000 jobs to private payrolls last month, the fastest pace of job growth since January 2025, according to the ADP National Employment Report released Wednesday morning. Healthcare continued to drive job growth, but April’s robust hiring was also helped along by a rebound in trade, transportation, and utilities. During the first quarter, private employers added an average of 46,300 jobs on a monthly basis. In fact, the private sector has managed to post positive job growth every single month so far this year. That’s in contrast to total nonfarm payroll data produced by the Bureau of Labor Statistics, which posted a massive decline in job growth in February in the combined private and public sectors.
2. Corporate Layoffs Are Down 10% This Year, but the AI Reckoning Has Come for Tech — Layoffs in the first four months of the year totaled 300,749, according to outplacement firm Challenger, Gray & Christmas, a level 50% lower than the same period last year when enormous federal-worker job cuts dominated the start of President Trump’s second term. Private-sector layoffs were 10% lower than this time last year.
Now AI is upending workplaces in ways both real and whitewashed. Tech has been hardest-hit, with firms letting go of more than 85,000 employees so far this year, a 33% increase over the same period in 2025, Challenger data show. The cuts keep coming, with fresh announcements in May of thousands more workers cut at PayPal and the elimination of “pure managers” at Coinbase.
3. U.S. Debt Tops 100% of GDP — As of March 31, the country’s publicly held debt was $31.265 trillion, while GDP over the preceding year was $31.216 trillion, according to data released Thursday. That puts the ratio at 100.2%, compared with 99.5% when the last fiscal year ended Sept. 30. That figure will likely climb for the foreseeable future because the federal government is running historically large annual deficits of nearly 6% of GDP, which add to the debt. The government also becomes more sensitive to interest rates as debt grows. One in seven dollars of federal spending now goes to interest. A 0.1 percentage-point interest-rate increase would cost $379 billion over 10 years, according to the Congressional Budget Office.
4. US Jobs Rise 115,000 in Strongest Two-Month Gain Since 2024 — Nonfarm payrolls rose 115,000 last month after an even bigger surge in March, marking the strongest two-month increase since 2024, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.3%. The advance in hiring was led by healthcare, which has been the primary driver of job growth over the last year. Transportation and warehousing and retail trade both added the most jobs since 2024. Employment in couriers and messenger services added almost 38,000 jobs, the most since 2020. Manufacturing employment fell slightly.

The week ahead — Economic data from Econoday.com:

“The consistency you seek is in your mind, not in the markets.” — Mark Douglas

1. Home Price Growth Unexpectedly Slowed in February. Blame High Mortgage Rates — Prices in an index tracking 20 of the nation’s large metropolitan areas rose 0.9% from a year ago, according to S&P Cotality Case-Shiller index data. That’s down from a 1.2% gain in January and slower than the 1.3% increase economists had anticipated, according to FactSet.
Prices nationally increased 0.7% from the year prior, slower than their 0.8% gain in January. Prices dropped most in Denver, where they fell 2.2%. Close behind were Tampa, Florida, where prices dropped 2.1%, and Seattle, where they fell 2%. Prices rose most in Chicago, New York, and Cleveland, with gains of 5%, 4.7%, and 4.2%, respectively.
2. Divided Fed Officials Hold Rates; Powell to Stay as Governor — Federal Reserve officials left interest rates unchanged, but revealed a deepening division over the outlook for policy amid increased uncertainty caused by the conflict in the Middle East. In what will be his last press conference as Fed chair, Jerome Powell said he intends to remain at the central bank as a member of its Board of Governors. He said Justice Department officials had assured him over the weekend they wouldn’t restart a controversial criminal investigation into the central bank unless the Fed’s internal watchdog recommended that.
3. Trump Says He Rejects Iran Hormuz Offer, Keeps Blockade — Trump said he had rejected a recent proposal from Iran to reopen the strait but that would have delayed talks on the nuclear issue until later. While Trump said he’d stick with the blockade, US military commanders have prepared a plan for a short and powerful wave of strikes on Iran to raise pressure on the regime, Axios said, citing people with knowledge of the preparations.
4. Core inflation rate hit 3.2% in March as first-quarter growth disappointed at 2% — The core personal consumption expenditures price index, which excludes food and energy, accelerated a seasonally adjusted 0.3% for the month, pushing the 12-month inflation rate to 3.2%, the Commerce Department reported Thursday. The readings matched the Dow Jones consensus estimates. Core inflation hit its highest level since November 2023. In other economic news , the Commerce Department reported that gross domestic product grew at a 2% seasonally adjusted annualized pace in the first quarter, up from 0.5% in the fourth quarter of 2025 but lower than the 2.2% estimate. The modest growth rate came despite a seeming surge in spending on artificial intelligence and what should have been a boost from the end of last year’s government shutdown.

The week ahead — Economic data from Econoday.com: