All three major market indexes look to finish higher this week as the jobs report came in stronger than expected. This gets to a recurring theme I touch on, which is that the economy is holding up better than expected given the challenges it faces. Yet, saying this has been an unusual year is an understatement. To highlight this idea, let’s consider a few data points. The S&P 500 logged its best month since November 2023 and its best May since 1990, per Bloomberg. At the same time, the S&P 500 has posted one of its worst starts to a year since the ‘50s and trails global stocks by the widest gap since 1993 (at this point in the year). The cherry on top is that the S&P 500 entered the week essentially flat for 2025. It is an unusual year indeed.
Let’s start with the good news. Despite dire warnings about an impending economic slowdown, hiring slowed only slightly in May, according to the Bureau of Labor Statistics. Nonfarm payrolls rose 139,000 for the month, above the estimate for 125,000 and only slightly below the revised 147,000 in April. Perhaps equally compelling, a more encompassing measure that includes discouraged workers and the underemployed also was unchanged, holding at 7.8%. Nearly half the job growth came from health care, which added 62,000 jobs. Leisure and hospitality contributed 48,000 jobs, coming in a close second. The best summarization is that stronger-than-expected job growth and stable unemployment underline the resilience of the U.S. labor market. As I always add, things could change.
Regarding tariffs, we don’t have much in the way of a resolution yet. President Trump gave countries a deadline of Wednesday to give us their best deal. I have not heard of any countries taking him up on that offer, which makes sense since much of the tariff authority is now in the hands of the courts. But President Trump did double down on the tariff on imported steel, increasing it from 25% to 50% as of June 4. This came as a surprise to Canada, which had thought it reached a deal last month. It also comes as a surprise to the UK, which was the first to secure a trade deal just three weeks ago. That deal allegedly included a zero-tariff provision for steel and aluminum, although the BBC reported the agreement was never signed.
This brings us to the Big Beautiful Bill. As has been reported over the past couple of weeks, the nonpartisan Congressional Budget Office (CBO) confirmed that the tax bill will likely add $2.4 trillion to U.S. debt over the next ten years while cutting taxes by $3.75 trillion. While Republicans united to pass the bill in the House, some GOP senators are less enthused by the rapidly rising national debt. Undoubtedly, you saw the news yesterday that the president and Elon Musk have parted ways. Musk spoke out vehemently against the bill going so far as to call it a “disgusting abomination,” while hoping to sway the deficit hawks in the Senate to vote against it. However, it is worth noting that in a separate CBO estimate, tariffs could shrink budget deficits by $2.8 trillion over 10 years if they remain in place.
In closing, I came across an interesting story that I am sure most of you are unaware of. It turns out that U.S. airlines charge passengers more to fly alone. According to Thrifty Traveler, the three largest carriers, American Airlines, United Airlines, and Delta, often charge passengers more if they are traveling alone. They give the example, if you wanted to book a flight from Chicago O’Hare to Peoria, IL, next month, it would cost $269 if you’re flying alone versus $181 if others are joining you. While the practice wasn’t consistent across all flights, it is an undeniable trend. Since the report was released, Delta and United have quietly gone back to charging the same price regardless of the number of travelers, leaving American Airlines as the last to continue this pricing strategy. Now you know.
Bruce J. Mason, MBA
