CNBC Daily Open: The observed slowdown of the U.S. economy depends on your vantage point

CNBC Daily Open: The observed slowdown of the U.S. economy depends on your vantage point


Shoppers carrying bags in the Soho neighborhood of New York, US, on Wednesday, March 26, 2025.

Yuki Iwamura/Bloomberg via Getty Images

Based on payrolls processing firm ADP’s jobs report and the U.S. Federal Reserve “Beige Book,” the United States economy appears to be slowing. The number of private sector jobs created in May rose by a mere 37,000, almost three times lower than the Dow Jones forecast. And the Fed report noted that “economic activity has declined slightly since the previous report” released April 23.

The ADP report, however, isn’t always aligned with the Labor Department’s jobs report, which will be released Friday. For example, the former stated that private companies added 107,000 jobs in January 2024, but the latter posted a 353,000 gain in nonfarm payrolls for the same period.

Meanwhile, the Fed’s “Beige Book” report is based on “reports from Bank and Branch directors” and “interviews and online questionnaires.” Hence, while it provides a useful snapshot of economic sentiment, it is a “qualitative” report, as the Fed acknowledges, that might not capture economic data.

According to Albert Einstein’s theory of relativity, the speed at which an object is traveling depends on the position of an observer. Wednesday’s reports can give an insight into the economy, but they could also be skewed by the vantage point of the observers.

What you need to know today

Dow snaps consecutive gains
U.S. stocks were mixed Wednesday. The S&P 500 was flat and the Nasdaq Composite added 0.32%. However, the Dow Jones Industrial Average slipped 0.22%, ending a four-day winning streak. The pan-European Stoxx 600 index rose 0.47% as the EU trade chief said talks with the U.S. were ‘advancing in the right direction.’ Separately, Bulgaria on Wednesday was approved to join the euro zone.

‘Extremely hard’ to make a deal with China: Trump
U.S. President Donald Trump said Wednesday on Truth Social that it was “EXTREMELY HARD” to make a deal with his Chinese counterpart Xi Jinping. On Monday, a senior White House official told CNBC that Trump and Xi were likely to speak this week. Washington and Beijing have blamed each other for violating a trade agreement reached in Switzerland on May 12.

Slackening labor market in the U.S.
Trump called on Federal Reserve Chair Jerome Powell to “LOWER THE RATE” after payrolls processing firm ADP reported the lowest level of private sector jobs creation in years. Payrolls increased just 37,000 for May, below the downwardly revised 60,000 in April and the Dow Jones forecast for 110,000. It was the lowest monthly job total from the ADP count since March 2023.

Fed’s ‘Beige Book’ reports slowing U.S. economy
The U.S. economy has contracted over the past six weeks as hiring has slowed and consumers and businesses worried about tariff-related price increases, according to a Federal Reserve report Wednesday. In its periodic “Beige Book” summary of conditions, the central bank noted that “economic activity has declined slightly since the previous report” released April 23.

Circle prices its IPO higher than expected
Circle Internet Group, the issuer of USD Coin, one of the world’s biggest stablecoins, priced its initial public offering at $31 per share late Wednesday stateside. That’s above the expected range of $27 to $28 and gives the company a total market value of $6.8 billion. New York-based Circle, its founder and some original shareholders will raise $1.05 billion in the offering of 34 million shares. 

[PRO] Financial sector stocks slowing
The financial sector, seen as a potential winner of the Trump administration, is starting to cool. While the group is still outperforming the S&P year to date, the gap has been closing in recent weeks, wrote Wolfe Research analyst Rob Ginsberg, who highlighted one aspect of the sector that is the “most concerning.”

And finally…

SXSW had branding all around the neighbourhood of Shoreditch in London.

Arjun Kharpal | CNBC

AI, trade and $24 socks: Inside the inaugural SXSW in London

South by Southwest, or SXSW, is a festival held in Austin, Texas, every year that brings together big names in music, film, art and technology. The organizers brought the event to London for the first time this week.

It may be a well-known event in the United States, but it certainly hasn’t reached the same level of recognition in Britain.

“What’s that?” asked a pedestrian who was passing by a SXSW London sign.

CNBC’s Arjun Kharpal looked at what’s going on inside.



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