As we pointed out last week, this is a very busy period for consequential economic news. First, we had the jobs report this past Friday. This report took on additional importance after we finally had more moderate jobs growth in April. So how did we do in May? The economy created 277,000 jobs, which was more than expected. The unemployment rate rose from to 4.0% from 3.9%, which was a bit confusing given the large gain in jobs – especially considering the labor participation rate did not change. The Bureau of Labor Statistics also disclosed that the previous two months of job gains were revised downward by 15,000 jobs – a fairly insignificant number. Altogether, this report was seen as stronger than expected.

Of course, the pace of wage growth is just as important as a contributor to overall inflation. Last month wages grew 0.4% from the previous month and 4.1% year-over-year. These numbers were higher than expected. Speaking of inflation, the Consumer Price Index will be released tomorrow and that will be followed by the Producer Price Index on Thursday. That is a lot of information for the Federal Reserve to consider during their meeting which starts today.

As we also pointed out last week, the markets are not expecting a rate cut to be announced tomorrow when the Fed meeting concludes. However, it would be nice for the Fed announcement to be a little softer when it comes to their holding the line on higher rates. Certainly, in the past several weeks — which included the release of the minutes of the last Fed meeting — the members of the Fed have been fairly unanimous in their statements regarding holding higher rates for a longer period of time. The jobs report has made any softening language less likely to happen.