From the Desk - Economic Commentary
Brandon Casey, Member Strategies - 5/8/2026
U.S. equity markets are trading higher on Friday as investors react to the April employment report and growing optimism around a potential resolution to the war with Iran. Both the S&P 500 and Nasdaq reached new record highs earlier in the session. All three major benchmarks are on pace to end the week in positive territory, with the S&P 500 up more than 2% and the Nasdaq higher by over 3%. If current gains are sustained through the close, the S&P 500 would post its sixth consecutive weekly advance.
The U.S. labor market showed better than expected momentum in April, with nonfarm payrolls increasing by 115,000, compared with forecasts of 55,000. The March report was revised higher to 185,000, while the February report was revised even lower, down 23,000 to a loss of 156,000 jobs. The unemployment rate was unchanged at 4.3%, in line with expectations, and the labor force participation rate fell to 61.8%, the lowest level since October 2021. Average hourly earnings rose 0.2% month-over-month and 3.6% from a year earlier, both slightly softer than anticipated.
The University of Michigan’s preliminary Consumer Sentiment Index edged down in May to 48.2 from April’s final 49.8, undershooting expectations near 49.5 and the lowest level on record. The deterioration was driven by a sharp pullback in the current conditions index, which fell to 47.8 from 52.5, while the expectations index ticked up modestly to 48.5, suggesting a slight improvement in the longer term outlook even as near term confidence sagged. Year ahead inflation expectations eased to 4.5% from April’s 4.7%.
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