3 June 2025 US Monitor Payroll growth likely slowed in May, ahead of a bigger deceleration

• We look for a 125K rise in May payrolls; the surge in distribution sector jobs likely has petered out...
• ...While the most reliable survey indicators show that rising uncertainty has weighed on hiring.
• Continuing claims data point to another rise in unemployment, increasing pressure on the FOMC to ease.

PM Datanote: US Weekly Jobless Claims, May 24

Cracks starting to show in the labor market.

PM Datanote: US Advance Goods Trade, April

Net trade and inventories on course for a big combined boost to headline GDP in Q2.

PM Datanote: US Personal Income & Spending, April

Consumption still resilient, but a slowdown looms.

2 June 2025 US Monitor Weaker consumers' spending and higher core inflation lie ahead

• Consumers’ spending is on track for respectable growth in Q2, but a sharper slowdown looms...
• ...As tariff-induced prices increases push up core PCE inflation, weighing on real incomes.
• Tariff-related distortions to the trade and inventories likely will artificially boost Q2 GDP growth.

May 2025 - US Economic Chartbook

STAGNATION AHEAD, AS THE TARIFFS HIT REAL INCOMES…

• …THE FED WILL START EASING IN Q3 AS PAYROLL GAINS SLOW