Steady Job Growth, Gyrating Trade Data, Stocks Rise, Sam Arrives

June 8, 2025

JOB GROWTH SLOWS A BIT:  In May, the U.S. economy added 139,000 new jobs, a little less than last month.  Government jobs decreased by 22,000, so all the increases were in the private sector.  The unemployment rate stayed the same at 4.2%.  Over the course of the past year, job growth is up by 1.73 million jobs.  Although lower than the prior month, this report was higher than expected.  Economists have been predicting more negative impact from tariffs and uncertainty.  Markets rose on the news.  Year-over-year wage growth came in at 3.9%.

STOCKS RISE:  U.S. stocks rose for the week, largely on the strength of the U.S. jobs report (see above).  While it was a bit slower than the month before, it was what the investors feared.  The fear was that hiring would slow dramatically due to tariffs and their impact on businesses. The Cboe Volatility Index is often called the "fear gauge."  It fell to its lowest point since February.  There was some negative reaction in the markets to the Trump/Musk feud, but that seemed to lose steam after a day.  We will see how that unfolds as that drama is not over.

LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.

THE TRADE SWING: U.S. GDP contracted last quarter, and a big reason was trade. In anticipation of tariffs, imports surged in the first quarter. This has a negative effect on GDP. Imports subtract from GDP in national accounting. That trade is now reversing. In April, the U.S. trade deficit shrunk by a record $76.7 billion. Exports rose by $8.3 billion while imports plummeted by a record $68.4 billion. Because of the surge in imports in the first quarter, imports should be soft in the next several months which will likely lead to a stronger second quarter GDP reading. So in essence, due to trade, the first quarter was not as bad as the GDP number indicated, and the second quarter will likely make overall economic growth look better than reality. The trade gyrations are creating some confusion in the data.

WAGE GROWTH: Prior to the COVID government shutdowns, average annual wage growth was running at about 2.9% (with lower inflation). Since April 2023, wage growth has stabilized, running at a steady 4.2%.

FIRST QUARTER EARNINGS: 496 of the 500 companies in the S&P 500 have reported their first quarter earnings, and 76% beat estimates (the historical average is 67%). Earnings are looking to be up about 14% in the first quarter.

THIS COMING WEEK: This coming week, new Consumer Price Index (CPI) and Producer Price Index (PPI) data will be released. More Treasury bonds will be auctioned, and that process will be watched closely. Oracle and Adobe will release their first quarter earnings.

70 IS THE NEW 53?: According to a recent study conducted by the International Monetary Fund, a 70-year-old in 2022 had the same cognitive ability as a 53-year-old in 2000. The physical robustness of that 70-year-old corresponded to someone who was 56 in 2000. According to my Garmin fitness watch, my "fitness age is 49."

LONG-TERM UNEMPLOYED: We have a very talented client who has struggled mightily to get another job after his prior company ran into troubles. For certain people in the economy, getting back into the job market can be a challenge. After the government economic shutdowns, there was an all-time high of 4.171 million Americans who were unemployed for over 26 weeks. The most recent low was 1.056 million in 2023. That has now crept up to 1.46 million people.

WELCOME SAM!: Last month we made an addition to the team here at Stonecrop. He has already proven to be a great asset. His name is Sam Stehr. We have known Sam for a while, and the time was right for him to join us. He already comes to us credentialed with his Series 65 license, and he is working on his Certified Financial Planner® designation! He came to us from Fidelity where he gained invaluable experience. Sam takes on the role of Client Relationship Associate at Stonecrop. (Look for new group photographs on our website soon.)

I LIKE A BUSY LIFE: I am still basking in the glow of our Ireland vacation, a very fun time. We got back home a week ago last Thursday, just in time to see my granddaughter's graduation (from Kindergarten) on Friday morning, and attend my wife's best friend's (since she was age 3) son's wedding in Maryland on Saturday. (At the wedding reception, my wife and her best friend asked me to take a picture. I just kept snapping pictures as they were joking around before they finally posed.) This past week was chock full of meetings with clients which invigorates and inspires me. I also managed to get in a round of golf with three old friends at a charity event.

Have a great week!

Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545

dmacgray@stonecropadvisors.com

“What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him.” Viktor Frankl

"A feast is made for laughter, wine makes life merry, and money is the answer for everything." Ecclesiastes 10:19

SOURCES:

JOB GROWTH SLOWS A BIT: https://www.wsj.com/economy/jobs/jobs-report-may-2025-unemployment-economy-87f19437?mod=hp_lead_pos5 AND https://www.bls.gov/news.release/empsit.nr0.htm

LONG-TERM UNEMPLOYED: https://www.calculatedriskblog.com/2025/06/may-employment-report-139-thousand-jobs.html

THE TRADE SWING: https://www.ftportfolios.com/retail/blogs/economics/index.aspx

FIRST QUARTER EARNINGS: https://myweeklystock.substack.com/p/weekly-market-recap-jun-2-6-the-s?utm_campaign=email-half-post&r=s86er&utm_source=substack&utm_medium=email

70 IS THE NEW 53?: https://www.goldmansachs.com/insights?chl=em&plt=briefings&cid=0606&plc=body

WAGE GROWTH: U.S. Bureau of Labor Statistics

(c) 2025 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.