Bloomberg - Evening Briefing - American job surge

US job growth surged in May and wages accelerated, prompting traders to yet again push back their expected timing of Federal Reserve interest-rate cuts. Nonfarm payrolls advanced 272,000 last month, beating all projections in a Bloomberg survey of economists. Average hourly earnings climbed 0.4% from April and 4.1% from a year ago, both picking up from the prior report. However, the unemployment rate—which is derived from a separate survey—increased to 4% from 3.9%, rising to that level for the first time in over two years. Still, the immediate news on Friday was generally good for American workers, though not entirely for Wall Street. “It’s a very Fed-unfriendly report–an easing-unfriendly report,” said Jay Bryson, Wells Fargo’s chief economist. “Taking this piece of data by itself means the Fed is likely to remain on hold for the next several months.” —David E. Rovella

The world’s biggest bond market got hammered as that solid jobs report poured water on rate cut hopes. A selloff in Treasuries drove yields up over 10 basis points, with swaps no longer pricing in a Fed reduction before December. But equities closed well off session lows as the data helped quell fears about an economic slowdown that could hurt Corporate America. Here’s your markets wrap.

Bad news for gold bugs. The shiny stuff fell the most in more than two years. Bullion slumped as much as 3.1%, the most since March 2022, while base metals also tumbled. After surging to a record above $2,450 an ounce, bullion has traded in a fairly narrow range amid the uncertainty over the Fed’s rate trajectory. 

The automotive industry has entered a fiercely competitive phase in the electric vehicle transition, and it’s producing a pleasant result for US car buyers: the first long-range EVs that are cheaper to buy than the average gas-powered car. At least three manufacturers now offer EVs with more than 300 miles of range for less than the cost of the average new vehicle sold in the US, according to an analysis by Bloomberg Green.

Source: Bloomberg Green, Edmunds

GameStop stock tumbled further on Friday after the highly-anticipated return of Keith Gill (“Roaring Kitty”) to YouTube, as well as the video-game retailer unexpectedly releasing earnings and announcing plans to sell up to 75 million additional shares earlier in the day. The stock sank as much as 44% following Gill’s appearance, where he reiterated his views on the company and confirmed that the massive positions posted on his Reddit account are his. The investor, who has sent shares on a wild ride in recent weeks, praised Ryan Cohen, GameStop’s chief executive and largest shareholder, and expressed faith in the management team’s ability to rework its business.

A United Nations report set to be released soon will say Israel isn’t doing enough to protect the rights of children in armed conflict. A UN spokesman said the country would be included in an annex of the report that lists countries that haven’t put measures in place to protect children. The Associated Press reported that the militant groups Hamas and Islamic Jihad also are being listed. Israel’s invasion of Gaza in response to the Oct. 7 attack by Hamas that killed 1,200 people in Israel has in turn killed 35,000 people in Gaza, officials have said. Israel was cited in last year’s report, but not as a country that had failed to take adequate measures to protect children. In the 2023 report, the UN said it verified more than 3,000 “grave violations” against some 1,100 Palestinian children and eight Israeli children in the West Bank, Gaza and Israel. The UN said this week that more than a million people in Gaza could experience the “highest level of starvation” by next month if the war continues.

People inspect the damage to a Gaza school complex for displaced Palestinians operated by the United Nations on Thursday. An Israeli strike killed at least 33 people there, according to local officials. Israel said it was targeting militants. Photographer: Ahmad Salem/Bloomberg

US President Joe Biden announced a new $225 million aid package for Ukraine during a meeting with his counterpart, Volodymyr Zelenskiy, and pledged continued support as Kyiv looks to turn the tide against a Russian invasion that’s killed tens of thousands of Ukrainians and decimated many cities and towns. Biden said Friday that part of the package would help Ukraine rebuild its electrical grid, which has been targeted by Russian attacks. It also includes munitions, artillery systems and air defense interceptors to repel Russia’s assault on Kharkiv. “I’m not going to walk away from you,” Biden told Zelenskiy, noting that it was Republicans in Congress who had blocked the aid. “We’re still in completely, thoroughly.”

Ground wars are still won with bullets and artillery shells. The US can’t make the latter fast enough. Russia’s war has evolved into a throwback to an earlier, ordnance-intensive era of warfighting—and the most important hardware on the battlefield is the 155 millimeter shell. At 2 feet tall, and weighing about 100 pounds, the shells are a standard munition among NATO countries. They also are in perilously short supply.

An employee readies shells at the Scranton Army Ammunition Plant in Pennsylvania.  Photographer: Rachel Wisniewski/Bloomberg

• Putin’s wartime banker tells him what he doesn’t want to hear.
• Trump’s angry media company investors are squawking to the SEC.
• After Hochul flip-flop, is there compromise for NY  congestion pricing? 
• Why are high schoolers from the US Northeast headed to the South?
• For that matter, why are nicotine pouches out of stock in America?
• Here’s everything Apple plans to show at its big AI-focused event.
• James Beard finalists include East African restaurant and pho shops.

Basic economy fares have become a fixture of America’s airline landscape, offering lower prices to flyers willing to forgo checked baggage, a free assigned seat or peanuts. But now they’re increasingly being used by the biggest carriers to lure price-conscious travelers away from the very upstart airlines that pioneered ultralow fares. The legacy carriers’ success, along with dramatically higher costs across the industry are forcing changes at the smaller airlines—and may even drive some out of business.

Illustration: Raisa Álava for Bloomberg Businessweek

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