By Scott J. Brown, Ph.D., Raymond James
The Surprising May Employment Report – In contrast to expectations of further deterioration, the May Employment Report suggested significant improvement in labor market conditions. No doubt, the economy has turned the corner as states have re-opened. However, the report was sharply at odds with the number of individuals receiving unemployment benefits. Even with the May job gains, we still have a long way to go for a full recovery. For the financial markets, the direction of change is what matters.
This Week – The Federal Open Market Committee is expected to leave short-term interest rates unchanged. Asset purchases are unlimited, but have slowed. After punting in March, Fed officials are expected to release revised projections of growth, unemployment, and inflation. Chair Powell will discuss the situation in his post-meeting press conference. The inflation reports for May are expected to be mixed, with some pickup in gasoline, but downward pressure from weak demand.