Today's Scoop:

Hey friends - almost Friday. Look out for our Weekly Scoop tomorrow.

Here’s what you need to know today…

1. Fewer people got laid off last week.

2. The economy started the year much stronger than expected.

3. The housing market keeps slowing.

S&P 500: 4,396.44
1Mo: +5% | 1Yr: +16% | 5Yr: +59%

The market drifted higher today on upbeat economic news.

Fewer people got laid off last week. The Labor Department reported initial jobless claims dropped to 239,000, more in line with pre-pandemic averages. Layoffs and unemployment have been extremely low until this month, when layoffs picked up for three straight weeks.

The economy started the year even stronger than initially projected. The Commerce Department revised its initial measure of first-quarter Gross Domestic Product (GDP) [🤓] from 1.1% to 2.0%, indicating a significant jump in economic growth. The economy got a boost from higher exports and consumer spending, which surged the most in almost two years.

The housing market keeps slowing. The National Association of Realtors reported the number of pending home sales, measured by signed contracts, declined in May from April and remains 22% lower than a year ago. Low available home supply, high prices, and expensive mortgage rates have cooled homebuying.

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• UPS workers threaten historic strike with a final ultimatum

• Google under fire for false advertising

• Overstock becomes Bed Bath & Beyond

• Amazon faces mounting antitrust scrutiny and calls for a breakup

• Nvidia gets caught in the US-China tech war

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Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is how we track how much stuff the economy is producing. The actual number (~$26 trillion) doesn't matter as much as the direction and magnitude. We track the growth rate of real GDP (inflation-adjusted) to know whether the economy is expanding or contracting from the previous quarter.

The reporting style can be a bit confusing. The main number you hear will be an annualized growth rate (+2.0%), representing how much the GDP would increase/decrease if the economy hypothetically grew at that rate for an entire year. It's different from how much our production increased/decreased quarter-to-quarter (+0.5%) and not representative of the growth/decline over the past year (+1.8%). Annualizing the past quarter’s change makes the backward-looking number a little more forward-looking.

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