3 Things You Need to Know This Week | Central Bank Forum, June PMIs, US Jobs Data (June 30, 2025)

Transcript

Jessica Breiland:

Hello and welcome to 3 Things You Need to Know This Week—our regular series designed to help you sift through the noise across financial media and understand what really matters for markets. And now here are three things you need to know this week.

First up, the Forum on Central Banking.

This week, central bankers from around the world are gathering in Portugal for the European Central Bank's annual Forum on Central Banking. US Federal Reserve Chair Jerome Powell will join a panel discussion with the heads of the European Central Bank, Bank of England, Bank of Japan and others.

Now, forums like this often grab the attention of market watchers. And it wouldn't be surprising if financial media coverage centers on what central bankers say, searching for clues about future monetary policy. However, we think putting too much emphasis on what central bankers say is misguided. Central bankers have a long history of saying one thing and then doing something entirely different. For example, in early 2022, Fed Chair Powell ruled out the possibility of a 75 basis point hike, only for the Fed to deliver four 75 basis point hikes in 2022.

Why does this happen? Central bank decisions are made by committee and are based on future data— which is impossible to predict today. While we certainly keep an eye on central bank developments, we remind investors that monetary policy is just one of many market drivers, and we don't think incremental rate adjustments are make or break for markets.

Next, June PMIs.

Last week, we got a fresh look at global economic activity with S&P Global releasing preliminary June PMIs for the US, UK, eurozone and Japan. This week, the picture should become clearer with the release of final June PMI figures. PMIs (or Purchasing Managers' Indexes) are economic indicators sourced from monthly surveys sent to private sector businesses. They can provide timely snapshots of business activity and can offer helpful context for investors.

What does recent PMI data tell us? Well, preliminary (or flash) composite PMIs for June indicated expansion in the US, UK, eurozone and Japan. The US and Japan saw stronger-than-expected growth in both manufacturing and services PMIs, while data from the eurozone and the UK was more mixed.

Importantly, the overall global composite PMI, which collects data from across 40 countries, has stayed expansionary. The big takeaway? Despite ongoing concerns about tariffs, inflation and recessions, the global economy has been resilient thus far, continuing to chug along. And that's a positive backdrop for stocks.

Finally, US jobs data.

This week, we'll get several updates on the US labor market. Key reports include May's Job Openings and Labor Turnover Survey, also known as the "JOLTS" report, June layoffs data, and the latest nonfarm payrolls and unemployment numbers.

Here's a look at where things currently stand. May payroll growth slowed compared to April, but it still topped expectations. And the unemployment rate has remained steady around 4.2% the past few months, with forecasts suggesting June's numbers will likely stay in that range. While job growth in the US has slowed compared to the rapid level seen in 2021 to 2022, to us, this looks more like a return to pre-pandemic trends rather than a warning sign for the economy.

Now, whether the latest jobs numbers exceed expectations or fall short, it's important to put jobs data in context. These reports show what's already happened, and they don't predict where stocks go from here. Remember, economic growth drives job growth, not the other way around. So, for investors, we suggest looking beyond the noise and avoiding drawing forward-looking conclusions from backward-looking jobs data.

And that's it for this episode of 3 Things You Need to Know This Week.

For more of our thoughts on markets, check out This Week in Review, released every Friday. You can also visit FisherInvestments.com. Thanks for tuning in and don't forget to hit like and subscribe!