Daily Rundown

May, 1, 2025

Chart of the Day

Number of the Day

0.0 - The change in the core PCE price index in March, the first month without an increase since the recession in 2020

Quote of the Day

"Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data. It can be difficult to make hiring decisions in such an environment." - ADP Chief Economist Nela Richardson

Wednesday's Highlights

Real GDP (Q1) fell by 0.3 percent, as imports surged and government spending fell. Core GDP was up by a healthy 3.0 percent.

Real disposable income (March) rose by 0.5 percent, the most in more than a year.

Real personal spending (March) moved higher by 0.7 percent, the most in more than two years.

The PCE price index (March) was unchanged on the month and up by 2.3 percent year-over-year.

The core PCE price index (March) was unchanged on the month and up by 2.6 percent year-over-year.

ADP's employment estimate (April) rose by 62,000, the smallest increase in nine months.

The employment cost index (Q1) was up by 0.9 percent for the third time in the last four quarters.

Pending home sales (March) rose by 6.1 percent, the biggest increase in 15 months.

Mortgage purchase applications (week of 4/19) fell by 4.4 percent, as 30-year fixed rates held steady at 6.9 percent.

Quick Commentary

Yesterday's full slate of data releases painted a fairly sanguine picture of the economy, as underlying growth held up well in the first quarter and, at least for one month, consumption prices flatlined. Even the ADP report was better than suggested by the headline, as it was weighed down by a drop in education/health care employment. There are clearly some pre-tariff effects at work here, however; equipment and software spending boomed by 22.5 percent in the first quarter, for example, while consumer spending on durable goods (read: cars) jumped by 3.2 percent in real terms in March. These trends are a good bet to reverse course in the months ahead, as trade policy puts both downward pressure on the pace of expansion and upward pressure on prices.

Today's Highlights

ISM manufacturing survey

Initial unemployment claims

Construction spending

Amazon earnings

Mastercard earnings

McDonald's earnings

Daily Trivia

What compact country has the smallest concentration of agricultural employment in the world, with farm workers accounting for just 0.1 percent of total payrolls?

(Wednesday's Question: What was the last major U.S. market to recover all of its home price declines from the late 2000s and early 2010s, not eclipsing its 2007 peak until 2021? Answer: Chicago)