The April employment report was mixed, with payrolls growth stronger than expected the unemployment rate unchanged, and hourly earnings growth slower than expected.
Nonfarm payrolls rose by 115,000 in April after an upwardly-revised 185,000 gain in March and a downwardly revised 156,000 decline in February. Private payrolls rose by 123,000, also above expectations and following a 190,000 gain in March.
Health care and social assistance jobs rose by 53,900 in April while transportation and warehousing jobs rose by 30,300 and retail trade jobs advanced by 21,800.
The unemployment rate remained at 4.3% in March, but the details suggested a deterioration in the employment picture. The labor force contracted by 92,000 as labor force participation declined. Household employment fell by 226,000 while the number of unemployed rose by 134,000.
Average hourly earnings were up 0.2% in April, the same as in March, but lifting the year-over-year rate to 3.6% from 3.4%.
The preliminary Michigan Sentiment index fell to 48.2 in May from 49.8 in April.
According to Michigan, consumers' assessment of current conditions deteriorated in May due to continued concerns about the Middle East conflict, but the near-term outlook improved on lower inflation expectations.
March wholesale inventories were revised lower to a 1.3% increase from a 1.4% gain in the advance reading.
At the same time, wholesale sales increased by 2.8%, faster than expected.
Combined with already released data for the retail and factory levels of distribution, business inventories are on track for a 0.9% gain while business sales are tracking up 2.1%. Both will be released on May 14, when updated retail inventory and sales estimates will be released.
The Q2 GDPnow initial estimate from the St. Louis Fed is for a 1.980% gain.
The Q2 GDP nowcast estimate from the Atlanta Fed is for a 3.7% gain, unrevised from the previous estimate.