Employment Data - In June, the U.S. added 147,000 non-farm jobs, exceeding expectations of 106,000, with the previous month's value revised from 139,000 to 144,000[3] - The unemployment rate fell to 4.12%, better than the expected 4.3% and down from the previous 4.24%[3] - The labor force participation rate was 62.28%, slightly below the expected 62.4%[3] Wage Growth - Hourly wages increased by 0.22% month-on-month, lower than the expected 0.3%[3] - Year-on-year wage growth was 3.71%, close to the expected 3.8%[3] Market Reactions - The strong employment data led to a significant reduction in July rate cut expectations, with a 73.2% probability of a September rate cut now anticipated[5] - The 10-year U.S. Treasury yield rose by 6.89 basis points to 4.346% due to improved economic data and reduced rate cut expectations[4] Legislative Impact - The "One Big Beautiful Bill" (OBBB) was signed into law, increasing the debt ceiling by $5 trillion to $41 trillion, which is expected to add $4.1 trillion to the total deficit over the next decade[5] - The market had anticipated the implications of OBBB, suggesting a "buy the rumor, sell the news" scenario[5] Economic Outlook - The ISM Services PMI rose to 50.8, indicating expansion, while the Manufacturing PMI recorded 49, slightly above expectations[4] - The Atlanta Fed's GDPNow model predicts a 2.6% growth for Q2 2025, while the New York Fed's Nowcast model estimates 1.56% growth for the same period[4]

Core Viewpoint - The upcoming US May non-farm payroll report is anticipated to reveal significant cooling in the labor market, as indicated by a series of concerning leading indicators, particularly the disappointing ADP employment data [1][3]. Employment Data - The ADP report for May showed only 37,000 new jobs added, far below the expected 114,000, marking the lowest figure since March 2023 and the largest deviation from expectations in nearly three years [1][3]. - Job losses were noted in the goods-producing sector, with a decrease of 2,000 positions, while the service sector saw a modest increase of 36,000 jobs, primarily driven by leisure and hospitality (+38,000) and finance (+20,000) [3]. - Small businesses (fewer than 50 employees) were particularly affected, losing 13,000 jobs, reflecting the direct impact of macroeconomic policy uncertainty on these vulnerable entities [3]. Economic Indicators - Initial jobless claims rose to 247,000, exceeding expectations and reaching an eight-month high, with the four-week moving average also at its highest since November 2021, suggesting prolonged unemployment durations [4]. - The ISM non-manufacturing PMI unexpectedly fell to 49.9 in May, indicating contraction in business activity for the first time since mid-2022, attributed to policy uncertainties affecting order delays [4]. Policy Uncertainty - Current policy uncertainties, especially regarding tariffs, are seen as a core factor contributing to the unclear economic outlook, with potential cost increases looming if negotiations fail [5]. - The upcoming non-farm payroll report is crucial for understanding structural changes in employment, particularly in the goods-producing sector, small businesses, and temporary jobs [5]. Market Reactions - Market consensus for new non-farm jobs has dropped to 130,000 from a previous 177,000, with some institutions predicting as low as 125,000 [7]. - The unemployment rate is expected to remain at 4.2%, but a rise to 4.3% or higher could signal recession risks [7]. - Average hourly wage growth is projected to slightly increase to 0.3%, raising concerns about a potential wage-inflation spiral due to high labor costs and declining productivity [7]. Short-term Volatility - The release of employment data is likely to cause significant volatility in stock, bond, and currency markets, similar to the reactions following the ADP data release [8]. - Current interest rate futures reflect expectations of at least two rate cuts by the Federal Reserve this year, with increased bets on a September rate cut if unemployment rises significantly [8].

Overall Economic Activity - Economic activity in the U.S. is generally experiencing a slight to moderate decline, with half of the regions reporting a downturn, while three regions are stable and three show slight growth [2][3] - Manufacturing activity is broadly contracting, and consumer spending is mixed, with retail and dining sectors showing weakness, although some categories like automobiles are seeing increased demand due to tariff expectations [2][3] - The housing market is sluggish, with new home construction slowing down and existing home sales remaining flat, while inventory pressures are rising [2][3] Labor Market - Employment conditions are relatively stable, with most regions reporting flat employment rates, although some sectors like manufacturing and construction are seeing layoffs or hiring freezes [4] - Wage growth is moderate, with over 70% of businesses adopting a cautious approach to future hiring, and many have prepared for potential layoffs [4][11] - Job openings have unexpectedly increased, but the number of voluntary resignations has dropped significantly, indicating weakened confidence in the job market [11][12] Inflation and Pricing - Prices have been rising at a moderate pace, with tariffs exerting upward pressure on costs and prices, leading manufacturers to raise prices or reduce profits [5][6] - The real estate market remains stable, but new construction activities are either flat or slowing down due to uncertainty and high costs [6] - Service industries are facing limitations in pricing power, with some businesses delaying price adjustments to maintain demand [5][6] Regional Economic Highlights - Boston reports slight declines in consumption and housing prices, with businesses delaying hiring due to tariffs [7] - Atlanta sees growth in the energy sector, particularly LNG exports, while manufacturing is noticeably declining [8] - San Francisco's technology and financial services remain stable, but retail is shrinking, and the agricultural and real estate markets are softening [9] Policy and Economic Outlook - The intertwining of tariff disputes and interest rate cut expectations is creating a dual challenge for the U.S. economy, with markets anticipating at least two rate cuts within the year [14][15] - Recent data has led to increased speculation about the Federal Reserve's potential rate cuts, with a significant probability now assigned to cuts occurring in September or earlier [14] - The uncertainty surrounding tariffs and geopolitical risks continues to weigh on economic outlooks, with many regions maintaining a cautious stance [9][10]

Core Viewpoint - The Shanghai Municipal Government is implementing a special action plan to boost consumption by enhancing government investment in various sectors, including education, healthcare, and cultural tourism, while also supporting the issuance of REITs in eligible projects [1] Group 1: Government Support - The Shanghai government is increasing investment in projects related to education, healthcare, skills training, elderly care, and cultural tourism [1] - There is a specific focus on supporting the issuance of Real Estate Investment Trusts (REITs) for projects in the consumption, cultural tourism, and elderly care sectors [1]

Group 1 - The core viewpoint of the article emphasizes the need to strengthen investment support to stimulate consumer potential and expand consumption infrastructure and services [1] - The plan aims to create a virtuous cycle of mutual promotion between consumption and investment through effective investments in new consumption formats and models [1] - The government will utilize various funding sources, including central budget funds, local government special bonds, and ultra-long-term special treasury bonds, to support projects in education, healthcare, skills training, elderly care, and cultural tourism [1] Group 2 - The initiative includes active support for eligible projects in the cultural tourism sector to issue Real Estate Investment Trusts (REITs) in the infrastructure sector [1] - The focus is on addressing public service shortcomings through increased investment in key areas [1]

Group 1 - Beijing's Development and Reform Commission has announced the "Beijing West Action Plan" focusing on key projects for 2025, including 95 major projects such as the Shougang Ski Jump and the renovation of the Shougang Park service trade fair venue [1] - The plan emphasizes the development of "Two Parks and One River," which includes the Garden Expo Park, Shougang Park, and Yongding River, aiming for coordinated development and ecological integration [1][2] - The initiative aims to enhance the region's industrial transformation by leveraging local resources and promoting the integration of culture, commerce, and tourism [2] Group 2 - The plan includes significant infrastructure improvements, such as enhancing transportation and public services, and constructing new educational and healthcare facilities to meet community needs [3] - Environmental sustainability is a key focus, with efforts to strengthen ecological protection and improve water quality, alongside initiatives to create a garden city and promote ecological product value realization [3]