The Consumer Is BREAKING, Economy Is SLOWING And KEY DATA COMING...

Markets are celebrating a “strong” jobs report… but the underlying data tells a very different story. In this video, Mark Malek breaks down the biggest economic releases from the week including nonfarm payrolls, labor force participation, consumer sentiment, CPI, PPI, retail sales, inflation expectations, and what all of it means for the Federal Reserve, stocks, and your portfolio.

The labor market is cooling, discouraged workers are rising, consumer confidence is near historic lows, and inflation risks may be heating back up just as Wall Street prices in rate cuts. Next week’s CPI, PPI, and retail sales reports could completely shift the market narrative heading into summer.
If inflation comes in hot again, the Fed could be trapped — and the market may finally have to confront reality.

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Transcript

SPEAKER_00 0:00

Hello everyone, I'm Mark Malik. I'm the founder of Wall Street Truth Bombs. Each week, I look back at the key economic data that dropped, and I look ahead at what's coming up next week. Those are the things that you need to have on your radar. This is the data that moves the markets. And what moves markets, you know, affects your portfolio. Guys, this was one of the heaviest economic data weeks of 2026, with job openings, private payrolls, the official employment situation, and consumer confidence all landing in a four-day window. The reports collectively painted a picture of a labor market that is slowing but not breaking, and a consumer whose confidence has deteriorated well beyond what the headline jobs number might suggest. Next week, the focus will shift to prices, and those reports will either open the door for a Fed rate cut or close it for the rest of the summer. Now, let's do the economic number review. The headline economic event of the week was Friday's Employment Situation Report from the Bureau of Labor Statistics for April 2026. Nonfarm payrolls, they grew by 115,000 jobs in April, well above the 55,000 whisper number that had built from tariff-related hiring anxiety, but down from March's 185,000. The prior month was not significantly revised. The unemployment rate held at 4.3%, matching estimates. The headline beat the fear. Markets responded positively, and both the SP 500 and NASDAQ closed the week out at all-time highs. But the details of this report deserve a little bit more attention than the headline invites. Labor force participation, guys, fell to 61.8%. It's the lowest reading since October 2021, as 226,000 workers literally exited the labor force entirely. When participation falls and unemployment holds steady, workers are leaving, not finding jobs. The U6 rate, that's the broadest measure of labor under utilization that adds part-time workers who want full-time work and people who are too discouraged to keep searching. That number, it rose to 8.2% from 8.0% in March. Guys, there are now 475,000 discouraged workers in the economy. Wage growth came in at 3.6% year over year, and that's below the 3.8% estimate. That reduces subinflationary pressure from labor, but it also signals that workers have less bargaining power than a year ago. Now, before I move on to the next number, I want to point out that you got to focus really carefully on these unemployment figures, right? Because the headline number doesn't necessarily give you the true picture. I put out a bunch of videos on this. You might want to go to our homepage and check them out, right? We want to look at things like uh of the not the headline number, but rather we want to look at these workers that have left the workforce, right? So the headline number counts only folks that are looking for work but not finding work. But folks who exit the labor force entirely because maybe they're discouraged, those folks are not counted. So the number really of folks that are unemployed but may want jobs, but might be discouraged is much higher than the headline number suggests. So you need to pay attention to a different set of numbers. Go check out our videos on that. Go to our homepage, you'll find them under things like the labor numbers are lying to you or something like that. Okay, now let's move on to another report that we got this week, also uh referring to the labor market. That's the Joltz report. And that was released on Tuesday. Um, and that added some context. So job openings were unchanged at 6.9 million in March. That's the third lowest reading since December 2020, with the openings to unemployed ratio at 0.95. Guys, that's below one for the eighth consecutive month. For your portfolio, this data confirms that the labor market is cooling, it's real, uh, and it is gradual. It's not a cliff, but it's also not a floor floor either. Okay, the second major release was Friday's University of Michigan preliminary consumer sentiment index for May 26. The headline came in at 48.2. That was below the 49.5 estimate, and it was down from 49.8 in April. Guys, we are near all-time lows for this survey that's been around for over 70 years. Current conditions fell roughly 9% on the month, and that was driven by deteriorating perception of personal finances and buying conditions for major purchases. About one-third of respondents spontaneously cited gas prices as a concern, and roughly 30% mentioned tariffs. Still, the striking detail: the decline was uniform across income levels, ages, education level, and political affiliations. One-year inflation expectations eased slightly to 4.5% from 4.7%. That's good news. And five-year expectations moved to 3.4% from 3.5%. It's a small move, but it's a good move. For your portfolio, falling buying conditions for major purchases is a direct leading indicator for the retail sales data that comes next week. Watch that connection carefully. Guys, if you like this type of content, please click like and consider subscribing. It's important to be in the know, and we hope that we can do it for you right here. Now, let's look at the week ahead. The most important data weeks of the first half of 26 is coming up. We get three major reports in three consecutive days that will collectively define the inflation narrative heading into summer and determine whether the Fed has any room to move before fall. There are no market holidays this week, and the Fed is not in a blackout this week as they were, so they will be out speaking, and we got to make sure we listen for them. Now, on Tuesday, May 12th, the Bureau of Labor Statistics released the Consumer Price Index for April 26th at 8:30 a.m. Wall Street time. This is the most market-moving release of any given month, especially now, given that inflation is top of mind. And given that the PCE number, which is another inflation number, came in a week and a half ago, that was hot. So March CPI uh came in hot at nine tenths of percent month over month and 3.3% year over year. That was driven heavily by energy. April is expected to show continued pressure from energy and an early tariff pass-through component that was not fully present in the March data. Domestic airfares for April, May travel are running at 10 to 15% above year-ago levels. Food inflation is expected to move from just below 3% toward 4% year over year. We got to watch that. Really, really important. Uh uh carefully. If core CPI, which strips out food and energy, comes in hotter than expected. Well, the Fed's projected single rate cut for 2026 becomes extremely difficult to execute before Q4. That is the scenario equity markets are most afraid of. On Wednesday, May 13th, the producer price index or the PPI for April drops at 8:30 a.m. Wall Street time as well. March PPI rose five tenths of a percent for final demand. Now, PPI is the pipeline inflation indicator. It measures what producers are paying and charging at the wholesale level before prices reach your grocery store or your car dealership. With tariffs hitting imported inputs first, PPI is where those costs show up earliest in the data chain. If April PPI accelerates, it signals that May and June CPI will likely follow. If PPI is flat or declining, it means producers are absorbing tariff costs rather than passing them through. That is better for consumers in the short run, but it compresses corporate margins and creates earnings risks later in the year, so it can affect your portfolios. Okay, on Thursday, May 14th, advanced retail sales for April 2026 hit at 8:30 a.m. Also Wall Street Time. This is the one that will test whether consumers are still spending or starting to pull back. March retail sales were artificially elevated by front loading demand and consumers rushing to buy big ticket items ahead of tariff price increases and also higher energy costs because the retail sales figure doesn't necessarily call uh calculate how many gallons of gas are purchased, but how much money is spent on gasoline. So you might want to check out. We had a Friday video on that, and it breaks down what last month's uh retail sales figure was hiding because it looked like a blowout number, but it really was not. Anyway, the pull through, uh I'm sorry, the pull forward effect uh for uh will not repeat in April that I just mentioned before. And the question really is whether the slowdown is temporary, a one-time unwinding of front loaded demand, or the start of a genuine spending retreat. Now, the University of Michigan's collapse and buying conditions for major purchases this week is a direct leading indicator for this exact report. Watch that connections. The two questions that markets will be trying to answer next week are these. First, is April inflation hot enough to close the door on any Fed cut in 2026? And finally, the second, is the consumer beginning to retrench in earnest? Or is the March front loading uh distortion masking underlying resilience? And also, is that elevated fuel cost also masking any of these underlying anomalies? I really urge you to check out that video from last Friday because we really go into a lot of details about that really, really important number. How those two questions, though, get answers will set the direction for equities, rates, and the dollar heading into summer, guys. I'm Mark Malik, and this has been your weekend data and week ahead review. Stay disciplined, stay truthful, and I will see you in the next one. Meanwhile, join me every day at Wall Street Truth Bombs where I drop them right here before the market figures them out. And don't forget to check us out on Thursday afternoons. We started our live streams last Thursday at 4.30 p.m. Wall Street Time. We are going to be back again at 4 30 next Thursday uh at 4 30 Wall Street Time. Come check us out. Uh come to our uh come to our YouTube homepage to find the link for that. We'll hope you come and join us and ask us some questions live because we break them all down there.