Weekly Market Commentary December 1st to December 5th 2025
While the all-important monthly unemployment report was delayed, the market began to see other postponed economic data including November’s ADP Jobs report, September’s Personal Consumption Expenditures (PCE) Price Index and the ISM Manufacturing and Services reports.
The latest ADP Employment Report indicated a notable slowdown in the U.S. Labor market, with private sector employment declining by 32,000 in November, a far cry from the expected 40,000 gain. Small businesses bore the brunt of this downturn, cutting 120,000 positions, a significant drop for firms with fewer than 50 workers. Slower wage growth, with year-over-year pay increases at 4.4%, further underscores a choppy environment. This will be the Federal Reserve last labor market report before December’s Fed Funds Rate decision, which will take place on the 10th.
The Federal Reserve’s preferred inflation metric was released on Friday. September’s PCE came in slightly below estimates at 2.8% year-over-year. Goods prices surged 0.5% on the month as tariffs continued to work their way through the economy while services prices were up just 0.2%. Energy was a surprising contributor to the report, up 1.7%. The reaction to the report was relatively muted as it was slightly stale.
The latest flash S&P Global US Manufacturing PMI stands at 52.5 for November, marking the tenth expansionary reading in the past eleven months. The U.S. appears to be better positioned than other developed countries as it continues a broad-based expansion phase. In comparison, manufacturing globally has slowed, especially in the Euro area.
The Institute for Supply Management said its Services Index was little changed at 52.6 last month from 52.4 in October. Economists polled by Reuters had forecasted the services PMI slipping to 52.1. Backlog orders remained weak, though the pace of decline slowed considerably.
The biggest news of the week was regarding Netflix. The streaming behemoth has agreed to purchase Warner Brothers for $82.7 billion, a move that will likely face antitrust scrutiny as Netflix gains the rights to valuable intellectual property including HBO, HBO Max, Harry Potter, Batman and Superman.
The S&P 500 closed at 6,870, barely up on the week as the market is in wait and see mode as many key companies have already reported earnings and the Fed meeting is next week. The Dow Jones Industrial Average finished at 47,955, up 0.50% on the week while the Nasdaq finished up 0.91%. In the fixed income markets, the 10-Year Treasury closed at 4.14%, up 0.13% from last Friday’s close.
Next week’s important economic releases include the Fed Funds Rate decision, October’s PCE and Producer Price Index (PPI) reports.
