© Reuters.
By Liz Moyer
Investing.com — Stocks surged into Thursday’s close ahead of Friday’s closely followed jobs report and this month’s interest rate decision by the Federal Reserve.
The central bank is all but certain to raise its benchmark rate by a half-percentage point, as it has been telegraphing. And it is expected to do the same in July. But after that, the outlook is murkier. If inflation trends lower, it could hit pause on more rate hikes in September or could revert to its more typical quarter-point move as it works to calm inflation.
Jobs data from Thursday showed lower than expected job creation at private employers, but Friday’s government data will offer a broader view of employment trends for May. Unemployment claims fell last week and are at multidecade lows.
Still, inflationary pressures persist in the rising costs of food, housing and fuel. Gasoline prices, a particularly vexing problem for policymakers at the White House in an election year, are continuing to climb as summer demand picks up. The national average reached over $4.71 a gallon on Thursday, according to AAA. That’s up from $3.04 a gallon a year ago.
While inflation has shown signs of cooling somewhat, these high gasoline prices could complicate the recovery. OPEC and its allies agreed Thursday to raise production to 648,000 barrels a day for July and August, which could have some incremental effect on lowering the end price of gas.
Airlines have said in recent days they are seeing robust demand from consumers bent on holiday travel despite rising ticket prices and fewer available flights and seats on many routes. The industry has struggled to keep up with the demand amid shortages of pilots and crew, and some have actually cut capacity during the summer to better handle any disruptions.
Here are three things that could affect markets tomorrow:
1. Jobs, jobs, jobs
It’s been a week of jobs data, capped off Friday by the much-anticipated government report for May. Analysts expect the economy added 325,000 jobs last month. The data are out at 8:30 AM ET.
2. Unemployment rate
Along with the jobs data will come the breakdown on . The rate for May is expected to be 3.5%, the same as the prior month.
3. Non-manufacturing PMI
The will come out as well, providing a glimpse into the service sector. Analysts are expecting a reading of 56.4, slightly below the 57.1 reading from April.
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