Week Ahead: Economic Indicators (5th May – 9th May) – US
Monday 5th May
09:45 ET
US S&P Services PMI April Final
The S&P Global US Services Purchasing Managers’ Index (PMI) is a monthly economic indicator that assesses the performance of the US services sector.
Derived from surveys of purchasing managers across various service industries—including finance, insurance, real estate, and business services—the PMI provides insights into business conditions such as output, new orders, employment, and prices.
As a diffusion index, a reading above 50 indicates expansion, while a reading below 50 signifies contraction.
In April 2025, the US S&P Prelim Services PMI declined to 51.4, down from 54.4 in March, marking the lowest level in several years. This slowdown was attributed to rising inflation, weaker orders, and widespread pessimism about the economy.
The implementation of widespread tariffs led to higher costs for service providers, fueling the fastest increase in prices for goods and services in 13 months.
Confidence about business conditions deteriorated sharply, reaching levels not seen since the pandemic. Employment also weakened, with slowed hiring in services.
What to Expect
US Stocks
The slowdown in the services sector may weigh on investor sentiment, particularly affecting equities in service-oriented industries.
US Dollar
A deceleration in services activity could lead to a softer dollar, especially if it influences the Federal Reserve’s monetary policy stance.
US Government Bonds
Signs of economic slowdown may increase demand for government bonds, potentially leading to lower yields as investors seek safer assets.
10:00 ET
US ISM Services PMI for April
The ISM Services PMI, published monthly by the Institute for Supply Management (ISM), is a key indicator of the economic health of the U.S. services sector. It is derived from surveys of purchasing and supply executives across various service industries, assessing factors such as business activity, new orders, employment, and supplier deliveries. A reading above 50 indicates expansion, while a reading below 50 signifies contraction.
In March 2025, the ISM Services PMI registered 50.8%, a decrease from 53.5% in February, marking the slowest pace of growth since June 2024. This decline was attributed to several factors:
New Orders: Fell to 50.4% from 52.2%, indicating a slowdown in demand.
Employment: Dropped sharply to 46.2% from 53.9%, reflecting a contraction in hiring.
Prices: The Prices Index decreased to 60.9% from 62.6%, suggesting a slight easing in input cost pressures.
The report also highlighted concerns over the impact of newly implemented tariffs, which have increased costs and contributed to business uncertainty. These factors have collectively led to a deceleration in the services sector’s growth.
What to Expect
US Stocks
The slowdown in the services sector may weigh on investor sentiment, particularly affecting equities in service-oriented industries.
US Dollar
A deceleration in services activity could lead to a softer dollar, especially if it influences the Federal Reserve’s monetary policy stance.
US Government Bonds
Signs of economic slowdown may increase demand for government bonds, potentially leading to lower yields as investors seek safer assets.
Tuesday 6th May
08:30 ET
US Trade Balance for March
The US Trade Balance measures the difference between the nation’s exports and imports of goods and services.
A trade deficit occurs when imports exceed exports, indicating that the country is spending more on foreign trade than it is earning.
This metric is for understanding the economic relationships between the US and its trading partners and can influence currency values, economic policy, and financial markets.
In February 2025, the U.S. trade deficit narrowed by 6.1% to $122.7 billion, down from a revised record of $130.7 billion in January. This improvement was driven by a 2.9% increase in exports, reaching a record $278.5 billion, while imports remained flat at $401.1 billion.
The goods deficit decreased by $8.8 billion to $147.0 billion, and the services surplus narrowed by $0.8 billion to $24.3 billion. The narrowing of the deficit was slightly better than economists’ expectations.
What to Expect
US Stocks
The narrowing trade deficit may provide a modest boost to investor confidence, particularly in export-oriented sectors. However, concerns about the impact of tariffs and potential retaliatory measures could temper market enthusiasm.
US Dollar
A reduced trade deficit can support the dollar, as it suggests stronger demand for U.S. goods and services abroad. Nevertheless, ongoing trade tensions and policy uncertainties may lead to volatility in currency markets.
US Government Bonds
Improved trade figures might lead to expectations of stronger economic growth, potentially resulting in higher bond yields. However, if investors perceive increased risks from trade policies, there could be a flight to safety, pushing bond prices up and yields down.
Wednesday 7th May
10:30 ET
US Weekly EIA Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, normally released every Wednesday by the Energy Information Administration, details the amount of crude oil held in storage across the United States.
It provides insights into the supply and demand dynamics of the oil market.
What to Expect
An increase in inventories suggests higher supply or lower demand, potentially leading to lower oil prices. Conversely, a decrease indicates lower supply or higher demand, which can drive prices up.
14:00 ET
US Interest Rate Decision & Rate Statement
The Federal Reserve’s Interest Rate Decision is a pivotal event where the Federal Open Market Committee (FOMC) sets the target range for the federal funds rate, influencing borrowing costs across the economy.
The accompanying Rate Statement provides insight into the Fed’s assessment of current economic conditions and hints at future monetary policy moves.
In March 2025, the FOMC kept the federal funds rate unchanged at 4.25%–4.50%, marking the second consecutive meeting with no change.
The decision reflected the Fed’s cautious approach, balancing resilient economic growth against stubborn inflation pressures.
The statement acknowledged “heightened uncertainty” in the economic outlook, with updated projections lowering expected 2025 GDP growth to 1.7% from 2.1%, and raising core PCE inflation forecasts to 2.8% from 2.5%.
What to Expect
US Stocks
Keeping rates steady may offer near-term support for stocks, as stable borrowing costs help businesses and consumers. However, if markets interpret the Fed’s tone as hesitant to cut rates in the near future, some sectors may face headwinds.
US Dollar
The decision to leave rates unchanged could provide modest support for the dollar, particularly if it signals that rate cuts are not imminent. A more cautious Fed could keep the dollar firm relative to other major currencies.
US Government Bonds
Holding rates steady, combined with concerns about persistent inflation, may limit expectations for aggressive rate cuts later this year. This could keep bond yields elevated, or even push them slightly higher if investors scale back expectations for easing.
Thursday 8th May
08:30 ET
US Weekly Initial & Continued Jobless Claims
The US Department of Labor releases weekly data on Initial Jobless Claims and Continued (Insured) Unemployment Claims, providing timely insights into the health of the labor market.
Initial claims reflect the number of individuals filing for unemployment benefits for the first time, while continued claims represent those who have already filed and are receiving ongoing benefits.
For the week ending April 19, 2025, initial jobless claims rose to 222,000, up from 216,000 the previous week. This increase suggests a slight uptick in layoffs but remains within the range indicative of a stable labor market.
Continued claims for the week ending April 12, 2025, decreased to 1.841 million, down from 1.878 million the prior week. This decline indicates that fewer individuals are remaining on unemployment benefits, suggesting that some are finding employment or exiting the unemployment system.
What to Expect
US Stocks: The slight increase in initial claims may raise concerns about potential softening in the labor market, possibly leading to cautious investor sentiment.
US Dollar
A stable labor market, as indicated by relatively low jobless claims, could support the dollar. However, any signs of weakening employment trends might exert downward pressure.
US Government Bonds
If jobless claims continue to rise, indicating potential economic slowdown, demand for government bonds may increase, leading to lower yields as investors seek safer assets.
Friday 9th May
08:30 ET
Canadian Employment Change for April
The Canadian Employment Change report, published monthly by Statistics Canada, measures the net number of jobs gained or lost across the Canadian economy.
It provides a key gauge of the country’s labor market strength and broader economic health.
The report also includes the unemployment rate, giving insight into how many people are actively seeking work compared to the total labor force.
In March 2025, Canada’s labour market weakened, with employment falling by 33,000 jobs.
This decline was driven largely by the loss of 62,000 full-time positions, which was partially offset by gains in part-time work.
The unemployment rate edged higher to 6.7% from 6.6% previously.
Significant job losses occurred in wholesale and retail trade, as well as in information, culture, and recreation sectors.
Regionally, Ontario and Alberta posted notable employment declines, while Saskatchewan saw modest gains.
What to Expect
Canadian Dollar (CAD)
Weaker employment numbers could pressure the Canadian dollar, as softer labor market conditions may lead to expectations of more accommodative monetary policy.
Canadian Government Bonds
A weakening labor market may increase demand for safe-haven assets, pushing Canadian government bond yields lower.
Canadian Stocks
Labor-sensitive sectors like consumer discretionary and financials may face some selling pressure, although prospects of monetary easing could provide broader market support.
Bank of Canada Policy
Soft employment data could raise expectations for potential rate cuts from the Bank of Canada if economic weakness persists.
