What’s going on here?

The US economy added more jobs than expected in May, but – hold the front page – that's not the full story.

What does this mean?

The number of folk in paying jobs is crucial to the economy, so US job numbers coming in above predictions might seem like cause for popped bottles and raised glasses. The country added 272,000 jobs in May, blowing past estimates of 180,000. Mind you, the unemployment rate unexpectedly picked up to reach 4%. That’s dishing out mixed signals for the Federal Reserve (the Fed), whose two main responsibilities are to keep employment full and inflation low.

Why should I care?

Zooming in: Deep pockets.

Average hourly wages climbed 4.1% in May compared to a year ago, easily outpacing the 3.4% rise in consumer prices over the same month. That’s not what the Fed wants to hear: so long as wages pick up much faster than inflation, Americans can keep on spending despite higher borrowing costs. And all that spending is stalling the inflation-cooling momentum the central bank built up last year. That said, households have mostly drained all the cash they stashed away during the pandemic, so they may eventually be forced to start tightening their purse strings.

The bigger picture: Hold your horses.

This jobs report is the penultimate piece of key data to come in before the Fed announces its interest rate decision on Wednesday. The final bit will be May’s inflation data, which’ll land on Wednesday morning. Economists expect the pace of price gains to have held flat at 3.4%, and core inflation – which strips out volatile food and energy prices – to have dipped slightly to 3.5%, from 3.6% the month before. So with the US labor market in decent shape and inflation still causing a ruckus, the central bank won’t likely be in a rush to slash interest rates.

What’s going on here?

Nvidia’s investors woke up to find themselves with ten times as many shares on Friday, thanks to the chip giant’s ten-to-one stock split.

What does this mean?

The stock split was the cherry on top of Nvidia’s tidy results from last quarter, giving every investor ten shares for each one they owned before. See, the market’s insatiable appetite for AI chips pushed Nvidia’s market value past $3 trillion earlier this week, knocking Apple off its perch as the world’s second-most valuable company. So this split is designed to make the stock more wallet-friendly to employees and investors. Going forward, there’ll be ten times as many Nvidia shares available, at a lower price, for each previous one – and all without diluting the company’s value or existing shareholders’ stakes.

Why should I care?

Zooming out: Divide and conquer.

Some see stock splits as a sign of confidence from a firm’s head honchos, suggesting that a company is making room for its share price to keep rising over time. That can be a self-fulfilling prophecy: a lower share price might make Nvidia stock look like a bargain, tempting more retail investors to buy in, which could drive up prices in the short term. Remember, though, that long-term stock performance will all come down to Nvidia’s profit and plans.

The bigger picture: Sharing the spotlight.

Nvidia’s success is inspiring many other chip companies around the world – and right now, they’re betting on AI-powered PCs. These notebooks and desktops are equipped with special chips that run AI directly on the device, bypassing the need for the cloud. Morgan Stanley expects that the souped-up models will make up 65% of the PC market by 2028, up from 2% this year – and if it’s right, Intel and AMD may well have a chance to steal some of Nvidia’s thunder.