Employment Remains on Solid Ground
Employment continues to be one of the most important indicators for both the economy and the stock market. A healthy labor market means more people are earning income, saving, investing, and contributing to overall economic growth. Those factors typically create greater demand for investment assets and provide support for stock prices. Conversely, rising unemployment often leads consumers to spend savings rather than invest, placing pressure on financial markets. The Federal Reserve closely monitors employment data when making interest rate decisions, making each monthly jobs report an important release for investors. However, it’s important to understand that the headline jobs report is based largely on surveys, making it what economists refer to as “soft data.” Because it relies on estimates from survey respondents rather than complete reporting, the data is often revised in subsequent months. The latest report was encouraging overall. More jobs were created than lost, the unemployment rate declined, and wage growth remained healthy at 3.5% year over year. While average hours worked declined slightly, rising wages combined with fewer hours worked still represents a positive development for workers. One surprising detail within the report was a decline in leisure and hospitality employment. Given the increased tourism and temporary hiring associated with the World Cup, many economists believe this portion of the report may ultimately be revised higher. To gain a clearer picture of labor market conditions, it helps to compare the survey-based data with “hard data,” such as initial unemployment claims. Unlike survey estimates, unemployment claims are based on actual filings submitted through state unemployment offices and are generally considered more reliable. Initial jobless claims have remained relatively stable throughout the year, while continuing unemployment claims have gradually declined. Together, these indicators reinforce the view that the labor market remains stable, not overheating, but not weakening either. A stable employment environment supports continued wage growth, consumer spending, savings, and investment activity. Those trends create a constructive backdrop for financial markets heading into the second half of the year.
Corporate Earnings Will Drive the Next Phase of the Market
Strong corporate earnings have been one of the primary drivers behind the stock market’s performance this year, and they are expected to remain a major theme throughout the remainder of the year. Corporate America has consistently exceeded expectations, helping fuel market gains. As a result, analysts have steadily raised earnings forecasts throughout the year. Earnings per share (EPS), a measure of how much profit a company generates for each outstanding share of stock, has seen meaningful upward revisions after remaining relatively flat throughout much of 2025. While this reflects confidence in the strength of American businesses, it also raises the bar. Investors will be watching closely to see whether companies can continue delivering results that justify today’s elevated expectations. Another important metric to monitor is operating margins. Markets are currently pricing in record profit margins over the coming year. If companies continue operating efficiently while maintaining strong profitability, stocks could continue benefiting from solid earnings growth. However, if expectations prove too optimistic, investors should be prepared for periods of increased market volatility. With midterm election uncertainty also entering the picture, earnings season will likely play an even larger role in determining market direction during the second half of the year.
Why Gas Prices Haven’t Fallen as Fast as Oil Prices
Although oil prices have retreated following the recent conflict in the Middle East, many drivers have noticed that gasoline prices have not fallen nearly as quickly. The explanation lies in how gasoline is produced, distributed, and taxed. The United States consumes more than 130 billion gallons of gasoline each year—more than any other country in the world. While crude oil prices rose sharply during the conflict and have since moved lower, retail gasoline prices typically respond more slowly. Gasoline is a refined petroleum product, meaning the cost of crude oil represents only one portion of the final price consumers pay at the pump. Refining costs, transportation expenses, distribution, and taxes all contribute to the total cost per gallon. As crude oil prices climbed, gasoline prices gradually followed. Now that crude prices have declined to levels closer to where they were earlier this year, gasoline prices are expected to follow, but historically, they tend to lag. Assuming geopolitical tensions do not escalate again, motorists could begin seeing more relief as the summer progresses and into the fall. Regional price differences also illustrate how much additional costs affect gasoline prices. States throughout the South and Midwest generally enjoy some of the nation’s lowest gasoline prices due to their proximity to Gulf Coast refineries. Meanwhile, states such as California, Washington, Hawaii, Nevada, and Oregon typically experience significantly higher prices. While crude oil costs are essentially the same nationwide, higher state taxes, increased transportation expenses, and greater distribution costs contribute to substantially higher prices at the pump. In Hawaii, for example, distribution costs alone exceed the cost of refining the gasoline. Understanding these components helps explain why gasoline prices often remain elevated even after oil prices begin to fall.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here
Trey Booth, CFA®, AIF®
Chief Investment Officer
Wealth Consultant
Email Trey Booth here
Ty Miller, AIF®
Vice President
Wealth Consultant
Email Ty Miller here
Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.
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