Weekly Economic Update

Last Week and the Economy

Unemployment Situation Update
Hormuz Shipping Resumes
Manufacturing Expansion Cools
Quarterly Economic Update

Major U.S. stock indices delivered mixed results during a holiday-shortened week ahead of Independence Day. The tech-heavy Nasdaq Composite led the advancing benchmarks with a 2.12% gain. The Dow Jones Industrial Average rose 1.97% and the S&P 500 Index climbed 1.76%. The small-cap Russell 2000 Index broke the positive trend with a decline of 0.46%. Overseas, the MSCI EAFE Index added 2.72%.

Nonfarm Payroll Growth Slows Sharply in June

The U.S. Bureau of Labor Statistics [BLS] released its June 2026 Employment Situation report on Thursday. The report showed 57,000 new nonfarm payroll jobs for the month – a figure that missed the consensus forecast of 115,000 positions. It also marked the weakest payroll reading since February. The agency revised down its April and May figures by a combined 74,000 positions, which points to a softer hiring trend than earlier estimates showed.

The national unemployment rate fell to 4.2% in June, down from 4.3% in May. This came alongside a labor force participation rate declined of 0.3 percentage points to 61.5%.

Professional and business services led the month’s gains with 36,000 new positions. Social assistance added 25,000 jobs and health care added 22,000. Leisure and hospitality moved the other way with a loss of 61,000 positions – a drop the BLS tied to weaker-than-usual seasonal hiring.

On the bright side, wage growth held steady during the month. Average hourly earnings for private nonfarm employees rose 13 cents, or 0.3%, to $37.64. Nominal hourly wages have risen 3.5% over the past 12 months. The average workweek for all private-sector employees held at 34.3 hours. The complete data set appears in the BLS Employment Situation report.

Oil Prices Hold Near Pre-War Lows as Hormuz Shipping Resumes

Maritime traffic through the Strait of Hormuz continued to recover after the United States and Iran signed a memorandum of understanding on June 17, 2026. The agreement reopened the strait, lifted the U.S. naval blockade of Iranian ports, and set up a 60-day window to negotiate a lasting settlement. Iran agreed to let ships transit toll-free during that window. Iran also insisted that it retains administrative control over the waterway.

The recovery has moved slowly. Freight operators remain cautious over sea-mine risk, elevated war-risk insurance costs, and the unsettled peace framework. Some operators have avoided the waterway or masked vessel movements. Analysts caution that traffic still sits well below pre-war volumes.

Crude oil held near pre-war levels through the week. West Texas Intermediate [WTI] traded around the high $60s per barrel, and Brent held near $72. Prices have retreated sharply from the wartime peak above $120 reached in late April.

Questions over transit fees and long-term control of the strait remain unresolved. Regional analysts expect Iran to keep leverage over the chokepoint even after the negotiating window closes. Full coverage of the talks appears in CNBC’s reporting on the U.S.–Iran memorandum of understanding.

Manufacturing Expansion Cools as Price Pressures Ease

U.S. manufacturing growth slowed at the end of the second quarter. The Institute for Supply Management [ISM] reported on Wednesday, July 1, that its Manufacturing Purchasing Managers’ Index [PMI] registered 53.3% in June. That figure fell 0.7 percentage points from May’s 54.0% and landed below the consensus forecast of 54.0%. Fortunately, the index held above the 50.0% mark for the sixth straight month, which confirms continued expansion across the sector.

Core demand indicators softened but stayed in growth territory. The new orders index registered 56.0%, down from 56.8% in May, while production eased to 52.2% from 54.3%. The employment index improved to 49.7% from 48.6%, though it stayed in contraction. Factory operators continued to hold staffing lean.

The sharpest move came in the pricing component. The prices index dropped to 73.0% from 82.1% in May, a 9.1 percentage-point decline. Input costs still rose, but at a far slower pace. Supply executives pointed to easing shipping delays and lower commodity pressures, even as Middle East disruptions and tariffs continued to affect raw materials. TD Economics published the full industry breakdown.

Quarterly Economic Update

U.S. equity indices posted broad gains in the second quarter of 2026. The small-cap Russell 2000 Index led every tracked benchmark with a 19.19% quarterly advance. The tech-heavy Nasdaq Composite followed close behind, up 18.51%. Further, the S&P 500 Index rose 14.87% and the Dow Jones Industrial Average added 11.49%. Overseas, the MSCI EAFE Index also climbed by 8.82%. Finally, the Cboe Volatility Index [VIX] indicated reduced volatility during the quarter – falling 22.81% to 19.49.

Data Sources for stock and index quotes: Yahoo Finance, WSJ

Key Economic Data Points

Data Point	Date	Current	Change from Prior Period	Next Report
Unemployment Rate	06-2026	4.2%	-0.1	July 2nd
FOMC Target Rate	06-2026	3.50% – 3.75%	No Change	July 29th
GDP	Q1 2026 (3rd estimate)	2.1%	+0.5	July 30th
PCE Inflation	05-2026	4.1%	+0.3	July 30th

Data Sources: U.S. Bureau of Labor Statistics, Federal Reserve, U.S. Bureau of Economic Analysis, U.S. Bureau of Economic Analysis

Weekly Quote:

Money looks better in the bank than on your feet.
-Sophia Amoruso – Entrepreneur

The Week Ahead – Economic Data & Events

Monday: Global Supply Chain Pressure Index, ISM Non-Manufacturing

Tuesday: Advance International Trade in Goods, Trade balance, Survey of Consumer Expectations

Wednesday: Wholesale Trade

Thursday: NAR Existing Home Sales

Friday: No additional reports or data releases.

Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday), New York Fed Staff Nowcast (Friday)

Source: New York Fed

The Week Ahead – S&P 500 Companies Reporting Earnings

Monday: No S&P 500 companies confirmed for this date.

Tuesday: No S&P 500 companies confirmed for this date.

Wednesday: No S&P 500 companies confirmed for this date.

Thursday: PepsiCo, Inc. (PEP): PMO

Friday: Delta Air Lines, Inc. (DAL): PMO

AMC = After Market Close, PMO = Prior to Market Open

Source: Yahoo Finance

Weekly Tip:

How can a girl go 25 days without sleep?

Weekly closing data for selected stock indices

Quarterly closing data and percent change for several major stock indices and measures

Data Sources for stock and index quotes: Yahoo Finance, WSJ

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Last Week's Riddle and Answer

Last Week's Riddle:
What has a head and a tail, is brown, but has no legs?

Last Week's Answer:
A penny.

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