This week’s economic data is coming in hot, and it’s the underdogs stealing the spotlight. While April’s PMI on Thursday and Friday’s payrolls will occupy most of the headlines, don’t sleep on the other players in the lineup.

First up, Tuesday brings the JOLTS report. Normally this is not the most exciting series, but this update on job openings might have something interesting to say.

Then on Wednesday, we get Q1 GDP. Usually this is a nonevent given the data’s lag time and the fact that it’s already priced into the markets, but this time might be insightful. The Atlanta Fed's GDPNow estimate is sitting at a gloomy -2.5%, though that’s with a big asterisk (hello, gold adjustment).

Want a sneak peek? Averaging retail sales and industrial production provides us with a decent crystal ball, and it’s hinting that GDP might not be as dire as the market’s doom-and-gloom consensus expects.

So, keep your caffeine handy as Wednesday could be interesting.

The Macro Week In Review

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The Macro Week Ahead

☎️ A Classic He Said Xi Said

Equity market prices currently reflect a trading regime focused squarely on rumors and statements regarding tariff negotiation between President Trump and the U.S. and President Xi Jinping and China. Early last week, President Trump suggested progress was being made while representatives from China refuted that idea. Last week, Treasury Secretary Scott Bessent indicated that a deal between the two nations may take years to formalize. Then, Friday morning we learned that China might exempt some U.S. imports on medical equipment and industrial chemicals. Stocks fell into the close on Friday as President Trump said tariffs of 20-50% in a year from now would be deemed a “total victory” and import tariffs will not be dropped unless China offers something “substantial.” Despite the uncertainty, the S&P 500 increased 4.6% last week with the Technology and Discretionary sectors leading the charge up 8.1% and 6.6%, respectively. These were the hardest hit sectors following Liberation Day.

🗺️ Where Do We Go From Here?

With the S&P 500 having now retraced a substantial portion of its tariff-fueled collapse, are we heading into a new upcycle or is this a bear market rally to be sold? Leading indicators of economic activity in the U.S. suggests that we lean toward the latter. Keep in mind, implementation of U.S. tariffs on imports only began in earnest on April 2nd, so it will take some time for the impact to hit U.S. store shelves and the Amazon carts of American consumers.

An article by the Financial Times indicates that many Chinese factories have begun shuttering capacity, “our export orders disappeared so we’ve temporarily stopped.” Many imports from China make their way east to the Port of Los Angeles. Daily ocean container bookings into this port were down 18.8% y/y according to SONAR’s Container Atlas. Imported goods to LA make their way across the U.S. via truckloads. Outbound truckload volumes from LA are now approaching low levels last seen during the pandemic. All this to say, we’re still in Phase 1 of this new global trade regime where hard economic data is still holding up while soft data like surveys are falling apart.  

📅 Breaking Down Last Week

The regional PMIs continue to show a stagflationary environment on the horizon. General Activity from Philly Services was -42.7 for April, a level only seen during the COVID outbreak. Prices Paid ripped higher to 46.5, a level last seen during the 2021/2022 “transitory” inflationary outbreak. April PMIs from Richmond and Kansas City provide similar takeaways.

Employment data in general is a lagging indicator of the business cycle. In Phase 2 of tariffs, when employers likely suspend their capex and reduce headcount following uncertainty and margin pressure, we’re expecting that the labor market will deteriorate. We’re not seeing it yet, but that brings us to this week …

🔮 The Week Ahead

It’s jobs week again. Tuesday we’ll see job openings, quits, and layoffs. To the extent that initial claims suggest employers are waiting to reduce headcount until tariff fallout hits, this somewhat stale March data from JOLTS may not rise as sharply as some would anticipate. Remember, pre-tariffs the U.S. labor market was tight, so it may take some time before employment is flashing red. We do get April jobs data from ADP on Wednesday, which was “strong despite policy uncertainty” last month per Chief Economist Nela Richardson. This month’s data will incorporate the tariff enactment.

Friday will be the most important day this week with the release of nonfarm payrolls for April and the unemployment rate. The data is notoriously volatile but is one of the most followed indicators on Wall Street. NFP is expected to be at 130k job adds this month compared to 228k in March. Economists expect the unemployment rate to hold steady month over month at 4.2%.

Labor markets will be critical heading into the Fed’s May 7th interest rate decision. Should this week’s April employment data weaken dramatically from tariff uncertainty it could lead to more accommodative monetary policy reaction. The Fed typically does not react to one month worth of data, no matter the severity of its trend. This means the 11% probability of a cut is likely realistic up against an inflation problem that was never solved, and tariffs on the horizon that are likely to exacerbate the situation further.

Macro Job Board

VP, Quantitative Investment Strategies Research @ Morgan Stanley (New York)

Conduct independent research on quantitative investment strategies across all asset classes with a focus on volatility in macro assets and equities. Experience in non-linear systematic strategies involving options for alpha generation or hedging is required.

Macro Credit Research Analyst @ KBRA (New York)

Expected to monitor, gather, and analyze macroeconomic and financial markets data. Will assist senior analysts in idea generation and the production of KBRA Strategist research reports, presentation slides, and decks.

Global Macro Research Analyst @ Goldman Sachs (Washington, DC)

This candidate will closely monitor political and policy developments 
and assist economists to publish timely and innovative research on macroeconomic, political, and policy developments and their economic impact. They will also work on economic research projects and publications.

What We Read This Weekend

📺 Why American Tech Stocks Are Newly Vulnerable

📉 U.S. Economy Was Already Sputtering Before Trade Pain Kicked In

💷 We’re Not Spending Cash, So Why Are We Hoarding It?

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