finance

Positive Jobs Data Met by Record Consumer Fear

Source: Bloomberg Business

New data from the federal government Friday indicated US employers had added more jobs than expected for a second month in a row, despite ongoing threats from inflation and the collateral damage of the Iran war.

With unemployment holding at 4.3%, according to the Bureau of Labor Statistics, the figures offer Federal Reserve policymakers space to keep interest rates unchanged for the foreseeable future. Last week, Fed Chair Jerome Powell said the job market has shown "more signs of stability."

But as is often the case of late, positive vibes of US government data didn't match the latest sullen read of consumer sentiment by the University of Michigan. The gauge fell in recent weeks to a record low on growing concerns about the impact of inflation on personal finances and buying conditions.

Confidence continues to languish as Americans' anxiety about the overall cost of living is compounded by sharply higher prices at the gas pump. The strain on household budgets poses a risk to consumer spending, a primary engine for the economy.

Gasoline prices breached $4.50 a gallon on average this week for the first time since July 2022, American Automobile Association data show. They're up more than 50% since the start of the Iran war.

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Ukraine and the Kremlin confirmed a planned three-day ceasefire in the long-running Russian invasion of that country after US President Donald Trump announced it Friday on social media, saying the White House was behind the truce.

Ukraine President Volodymyr Zelenskiy said "we expect the United States to ensure that the Russian side fulfills these agreements," noting that Moscow and Kyiv had agreed to swap 1,000 prisoners of war each. The temporary ceasefire coincides with Russia's celebrations of the end of World War II in Europe.

Trump's announcement came the same day as The Economist, adding to previous news reports that Russia has helped Tehran target the US military, reported the Kremlin offered to provide Iran with "unjammable" fiber-optic drones with which to attack American forces.

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The one-page document implies Iran's acceptance would end the 10-week war, in which thousands of people have been killed in Iran and Lebanon. Tehran said its response is "under review."

The Virginia Supreme Court joined the US Supreme Court in handing another huge legal victory to Republicans as they move on multiple fronts to alter the playing field ahead of November's midterms while Democrats struggle to counter.

The state court blocked a voter-approved map that could have flipped as many as four GOP-held US House seats in November. At Trump's direction, Republicans in states they control have been engaging in mid-decade gerrymandering in an effort to marginalize Democratic voters and maintain control of Congress. Democrats have been attempting to return fire in blue states, but with mixed results.

Although the Virginia officials could now turn to the US Supreme Court, that would be a longshot bid given Friday's ruling was based on the state constitution. Last week, the Supreme Court's Republican-appointed supermajority disassembled key provisions of the 1965 Voting Rights Act in a move that enabled Republicans in several southern states to start redrawing their maps to eliminate Democratic-leaning districts.

The momentum trade -- buy what's winning, sell what isn't -- was already running red-hot heading into this week. Now a tenuous pause in the Iran war, strong government jobs data and another sharp rally in artificial intelligence chips just piled on more fuel.

The dominance of the trend-chasing trade reflects the apparent resilience of the US economy and a market all-in on the AI wave -- bubbles be damned. For some on Wall Street, the trade has begun to look self-reinforcing -- gains in a narrow set of large-caps are drawing more cash into passive funds that own those same names. Still, even those riding the rally say fundamentals are backing the trade.

For now, anyway. Barclays strategists say the momentum rally has reached extremes that historically foreshadowed selloffs. And at Goldman Sachs, the trading desk wrote this week that valuations for high-momentum stocks are stretched and positioning is among the highest in recent years.

Earnings for workers grew by less than expected in April, Jonathan Levin writes, which means next week's inflation numbers may show consumer prices rising faster than wages -- again.

The Canadian economy has shed 112,000 jobs so far this year, the weakest four-month stretch since the Covid-19 pandemic in 2021. Employment fell by 17,700 in April while more people looked for work, pushing the unemployment rate up to 6.9%, according to government data. Economists surveyed by Bloomberg were expecting an increase of 10,000 jobs and for the jobless rate to hold steady at 6.7%.

Although employment on a year-over-year basis was up 67,000, it plunged steeply over the first four months of 2026, with the losses almost entirely concentrated in full-time work. So why is Canada suffering? The prime suspects are the global trade war and real war being waged by the US, which have combined to hobble its neighbor to the north.

Jane Street just keeps raking in the cash, cementing its position as the new king of Wall Street. The firm notched a record quarter in the first three months of the year with $16.1 billion of trading revenue, more than double its haul in the first quarter of 2025.

Jane Street outpaced its major peers, including Goldman Sachs and JPMorgan, when the market maker set a record in 2025 with trading revenue of $39.6 billion. A trading haul of $16.1 billion in the first quarter of 2026 is more than 40% of what Jane Street posted last year.

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New York officials are trying to give shape to the pied-à-terre tax proposed by Governor Kathy Hochul, with significant questions about how the levy would work still unresolved amid broader Democratic discord over the state budget.

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