Labor Market Keeps Swinging… Despite the Geopolitical Fastballs
- David Halseth
- 9 hours ago
- 2 min read
For the week ended 5/9/26.
The U.S. labor market once again managed to surprise the “experts” which, at this point, may be the most reliable economic indicator we have. In April, the economy added 115,000 jobs, comfortably ahead of expectations for just 55,000. Yes, job growth slowed from March’s 185,000 pace, but considering the backdrop of the Iran conflict and rising energy prices, the labor market continues to show remarkable resilience. The unemployment rate held steady at 4.3%, right in line with expectations.
More importantly, the broader trend remains better than last year. Through the first four months of 2026, monthly payroll gains have averaged roughly 76,000 compared to just 42,000 during the same stretch in 2025. Healthcare remains the hiring machine, but gains are broadening into retail, transportation, warehousing, and other sectors. Translation? The U.S. economy may be bruised, but it’s still standing upright and throwing punches.
Meanwhile, the capital markets decided to channel their inner caffeinated squirrel. Domestic equities rose 2.4% last week, while the tech-heavy Nasdaq ripped 4.5% higher to yet another all-time high – capping its strongest six-week rally since 2009. Let that marinate while taking another sip of coffee. And yes, the AI-fueled chip stock frenzy remains alive and well, powered by blockbuster earnings and easing fears the artificial intelligence trade was about to implode under its own hype.
International stocks joined the party as foreign shares climbed 2.9%, largely thanks to fresh optimism surrounding a potential Iran ceasefire. Apparently, markets now believe geopolitical tensions simply vanish once diplomats issue a strongly worded statement and everyone promises to “work toward peace.” Sure. And I’ve got beachfront property in Nebraska available at a discount.
Elsewhere, global real estate gained 1.1%, bonds managed a modest 0.3% rise, and commodities finally cooled off as oil prices eased on ceasefire chatter. Even with the pullback, commodities remain the clear performance leader in 2026, up a scorching 27.8% year-to-date. Crypto, meanwhile, continues auditioning for the role of “most disappointing asset class,” down 11.2% on the year.
The big event this week arrives Tuesday with the latest CPI inflation report. Economists expect year-over-year inflation to jump to 3.7%, a painful leap from the pre-Iran conflict level of 2.4%. If accurate, it’s another reminder that geopolitical events still have an annoying habit of showing up in your wallet.
With that, enjoy your morning brew, stay productive, and remember: markets may climb walls of worry, but inflation usually brings a wrecking ball.
Interesting data point of the week.
