John Hancock: Weekly Market Recap Week Ended May 27th

Fed’s inflation urgency

Wednesday’s release of minutes from the latest U.S. Federal Reserve meeting showed that policymakers were open to the possibility of raising interest rates by a half a percentage point at both of their next two meetings, as they did at their early May gathering. Officials acknowledged that any additional half-point rate hikes could deliberately slow economic growth in order to fight inflation.

Savings drain

Although retail spending has held up relatively well despite high inflation, a government report released on Friday indicated that much of that spending is coming at the expense of Americans’ savings. In April, the personal saving rate fell to 4.4%, the lowest level since 2008, the onset of the global financial crisis.

GDP checkup

The U.S. economy’s stumble in this year’s first quarter was slightly worse than initially estimated. The government’s latest GDP figure released on Thursday showed that the economy contracted at an annual rate of 1.5%, instead of the initial estimate of a 1.4% contraction. Weaker private inventories and household investment triggered the downward revision.

Jobs ahead

A monthly U.S. labor market update due out on Friday will show whether the strong growth recorded in April carried over into May. In April, the economy generated 428,000 new jobs—identical to March’s jobs number—and the unemployment rate stayed unchanged at 3.6%.

Source: https://wmr.jhinvestments.com/