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Murphy's Market Minute | May 8, 2026
U.S. stocks moved higher this week, supported by a stronger-than-expected April employment report. The economy added 115,000 nonfarm payrolls — well above consensus expectations near 55,000 — while the unemployment rate held steady at 4.3%. Wage growth also came in softer than expected, with average hourly earnings rising 0.2% for the month and 3.6% year-over-year. Cooler wage growth is viewed positively by markets because it reduces the risk of labor costs contributing to persistent inflation pressures. Job gains were concentrated in healthcare, transportation and warehousing, and construction, while federal government employment continued to decline.
Earlier in the week, the ISM Services PMI for April came in at 53.6%, marking the 22nd consecutive month of expansion in the services sector. However, investors were more focused on the Prices Paid component, which remained elevated at 70.7% — a four-year high — signaling that service-sector inflation pressures remain persistent. Since services account for roughly 70% of U.S. economic activity, sticky services inflation remains one of the primary obstacles preventing the Federal Reserve from signaling imminent rate cuts.
Consumer sentiment continued to weaken as well. The University of Michigan’s preliminary May sentiment reading fell to 48.2 from April’s 49.8 reading, remaining among the lowest levels on record. Higher energy costs and broader economic uncertainty continue to weigh on household confidence, even as long-term inflation expectations remain relatively stable.
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By Elliot OmansonU.S. stocks moved higher this week, supported by a stronger-than-expected April employment report. The economy added 115,000 nonfarm payrolls — well above consensus expectations near 55,000 — while the unemployment rate held steady at 4.3%. Wage growth also came in softer than expected, with average hourly earnings rising 0.2% for the month and 3.6% year-over-year. Cooler wage growth is viewed positively by markets because it reduces the risk of labor costs contributing to persistent inflation pressures. Job gains were concentrated in healthcare, transportation and warehousing, and construction, while federal government employment continued to decline.
Earlier in the week, the ISM Services PMI for April came in at 53.6%, marking the 22nd consecutive month of expansion in the services sector. However, investors were more focused on the Prices Paid component, which remained elevated at 70.7% — a four-year high — signaling that service-sector inflation pressures remain persistent. Since services account for roughly 70% of U.S. economic activity, sticky services inflation remains one of the primary obstacles preventing the Federal Reserve from signaling imminent rate cuts.
Consumer sentiment continued to weaken as well. The University of Michigan’s preliminary May sentiment reading fell to 48.2 from April’s 49.8 reading, remaining among the lowest levels on record. Higher energy costs and broader economic uncertainty continue to weigh on household confidence, even as long-term inflation expectations remain relatively stable.