Weak Employment Data Raises Market Concerns
On June 4th local time, the United States released two key economic data points, both falling short of market expectations and causing market turbulence. The ADP employment report, known as the "little non-farm", showed that the U.S. private sector added only 37,000 jobs in May, the lowest since March 2023 and significantly below the expected 110,000. ADP Chief Economist Nela Richardson stated that the hiring boom at the beginning of the year has waned, with employment growth clearly slowing.
Simultaneously, another important indicator of economic vitality also disappointed. The Institute for Supply Management (ISM) released the service sector Purchasing Managers’ Index (PMI), which fell to 49.9 in May, below the expected 52 and April’s 51.6. This marks the first time in nearly a year that the index has fallen below the growth-contraction threshold of 50, indicating that the U.S. service sector may have slipped into contraction.
Trump Presses Again: Powell Must Cut Rates Now
After the ADP data release, U.S. President Trump immediately took to social media, directly naming Federal Reserve Chairman Powell. He wrote: “The ADP employment report is out, ‘Mr. Too Late’ Powell must cut rates now. This is unbelievable! Europe has cut rates nine times!” Trump has publicly pressured the Federal Reserve once again, demanding action to stimulate the economy.
This statement also highlights Trump’s concerns over the current economic slowdown trend, especially as his tariff policies tighten global supply chains. Some economists believe that the U.S. job market may weaken further in the coming months, with tariff uncertainty being a major risk factor.
Market Reaction: U.S. Stocks Under Pressure, Gold and Bonds Rise
Affected by the weak data, U.S. stock market futures for the three main indexes fell before opening. After the market opened, despite attempts to rebound, the ISM data dealt another blow. The Dow Jones index inched up by only 0.07%, with the S&P 500's gains narrowing to 0.15%, and the Nasdaq rising by 0.16%.
On the other hand, investor demand for safe-haven assets increased, causing the dollar index to weaken in the short term while U.S. bonds and spot gold prices strengthened. As of press time, spot gold has climbed back above $3,380 per ounce, with the intraday rise expanding to 0.9%.
Market Focus Shifts to Non-Farm Data
Currently, investors are generally focusing on the U.S. May non-farm payroll report (BLS) due this Friday, which will provide a more comprehensive picture of the labor market and potentially further influence Federal Reserve policy direction.
Amid continuously weak economic data signals, Trump hopes to counter risks through rate cuts, while whether the Federal Reserve will respond and how it will adjust policies will depend on future economic indicators and inflation trends. The market is waiting for more clues.
