Big Week for Jobs, Earnings and the Fed

Monday, July 28, 2025

We tiptoe into one of the busiest weeks of the year — not only because Q2 earnings season shifts into a higher gear, but because this is the week that gives us a new Federal Open Market Committee (FOMC) meeting and Personal Consumption Expenditures (PCE) report (PCE is the Fed’s preferred gauge on inflation). It’s also Jobs Week, because June JOLTS, ADP ADP private-sector payrolls for July, Weekly Jobless Claims and the always-important Employment Situation report from the U.S. Bureau of Labor Statistics (BLS).

Q2 Earnings Outlook This Week

Again, we’re starting slow in this busy week, but Q2 earnings season sets up to bring us four of the “Magnificent 7” stock earnings reports between now and Thursday afternoon: Microsoft MSFT and Meta Platforms META on Wednesday after the bell and Apple AAPL and Amazon AMZN a day later. We’ll see Cadence Design Systems CDNS and Whirlpool WHR report after today’s closing bell.

This week also brings us important mainstays on the earnings front such as Procter & Gamble PG, Starbucks SBUX and Visa V tomorrow, Ford F and Qualcomm QCOM Wednesday and ExxonMobil XOM Friday morning. In all, 164 companies of the S&P 500 will have posted earnings results by Friday, August 1st.

Fed Unlikely to Lower Rates on Wednesday

Despite President Trump’s long and very visible campaign to change Fed Chair Jerome Powell’s mind about the ongoing Fed funds rate — it’s been at +4.25-4.50% since December of last year, meaning for the entirely of Trump’s second term so far — due to a relative equilibrium having been reached in the Fed’s dual mandate. An Unemployment Rate of +4.1% and an Inflation Rate at +2.7% (up from +2.3% reached a couple months ago) demonstrate current rates are having their desired effect.

That said, Fed Governors Chris Waller and Miki Bowman are likely to file the first dissents in some time from the ongoing narrative about interest rates at the conclusion of the upcoming FOMC meeting Wednesday afternoon. There’s only a 2% chance the Fed has enough votes to cut to outstrip Powell’s opinion to keep interest rates where they are. After an August break, September’s odds go up to +67% for a 25 basis-point (bps) cut.

This is expected to once again raise Trump’s hackles, although perhaps his early-week successes — a trade deal with the EU and ongoing negotiations with China in Stockholm, Sweden — will soothe the president somewhat. Any big, unexpected changes to PCE or the labor market this week — say a sub-100K read on monthly employment, a negative Q2 GDP or a near-+3% year over year PCE — will happen too late for the Fed to pivot on its final decision on rates this summer.

Labor Market Solid… but Weakening?

We don’t see it in continually shrinking Initial Jobless Claims per week (back down to 217K last Thursday), but this week’s jobs figures ought to help answer several questions raised in last week’s Jobs Week reports: ADP private sector payrolls posted a negative -33K jobs filled in June, the first negative print in more than two years.

And, while that Friday’s subsequent BLS report came in at +147K, more than half of those new jobs came from State & Local Government. What that means is that only around 70K new jobs were filled in June outside government hires; 70K isn’t enough to cover the monthly deluge of retiring Baby Boomers and older GenX. So another leg down here — as well as a Continuing Jobless Claims tally closing in on 2 million per week — would change the narrative of the U.S. having a strong labor market, thereby reviving the idea that the Fed needs to cut rates.

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