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Economists expect unemployment rate to hit 16% and more news that can affect your money this week

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April was likely one of the worst months in history for the U.S. economy, but it was also the best month for the U.S. stock market in 33 years.

Since reaching its lowest level in nearly four years on March 23, the S&P 500 has surged more than 26%, marking its best rally in a comparable time since 1938. The market's surge reflects a rapid change in sentiment on Wall Street, as traders wager that the U.S. economy will bounce back even as the economic damage still is being tallied.

In the past week, a report showed that gross domestic product (GDP) shrank 4.8% in the first quarter, its biggest contraction since the financial crisis. And the number of Americans who have filed for unemployment benefits in the past six weeks has totaled more than 30 million.

One of the most closely watched economic data releases on Wall Street is due in the week ahead: the monthly labor report. Meanwhile, earnings season continues with Tyson Foods, CVS Health, General Motors, and MetLife among the 140-plus companies scheduled to report first quarter results.

Finally, traders will be watching the rebound in oil prices.

Here's what to watch in the stock market during the week ahead — and how the news could affect your bottom line.

Economists project highest unemployment rate since 1930s

What's happening: The Department of Labor's monthly employment report is scheduled for release on May 8, and it's likely to reflect the continued toll of the coronavirus outbreak. 

Economists are projecting that April will be the worst month for workers since the Great Depression. These experts forecast that the U.S. economy lost more than 21 million employees and the unemployment rate surged to 16%. Those estimates are similar to what the weekly reports have shown us, that more than 18% of Americans have filed for unemployment benefits.

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Why it matters: Traders have been looking past grim reports about the state of the economy in recent weeks, but some investors caution that this optimistic tone may not last. That's because the market's comeback hinges on the economy reopening without any major setbacks. And a recession, or two consecutive quarters of declines in gross domestic product (GDP), now is inevitable, according to many experts.

While the service industry has been especially hard hit by the coronavirus outbreak, the monthly jobs report will also reveal the ripple effect into other sectors. That said, some experts believe the unemployment rate will peak in April, as several states have already begun to reopen.

What it means for you: If you're out of work, the government has stepped in to provide assistance. File for unemployment benefits, track down your stimulus check if you haven't received it yet, catch the eye of recruiters by optimizing your LinkedIn profile, and find some ways to earn extra cash while you look for a new job.

Finally, because employment is one of the most-watched economic indicators on Wall Street, expect there will be some short-term volatility in the stock market surrounding these reports — especially if there are surprises.

Oil prices are rebounding

What's happening: Oil prices just rose for the first time in four weeks, after an unprecedented plunge that caused the price of oil futures to briefly turn negative in April. Even though demand for fuel has slumped worldwide, one reason prices are rising is because supply in the U.S. isn't growing as quickly as some traders had feared. 

Even with the recent gains, however, oil prices still are down more than 66% so far this year, and the average price of a gallon of gas has fallen below $1.80

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Why it matters: If oil prices can continue to rebound, that will suggest that traders are feeling more confident about the global economy in the wake of the coronavirus pandemic. That's because professionals on Wall Street closely monitor oil prices, which are closely tied to demand for fuel, as a barometer to predict the pace of economic growth ahead.

What it means for you: A more sustained surge in oil prices could help push stock prices higher as well. Generally speaking, lower oil prices are good for consumers because it will cost less to fill up your gas tank or to transport items you buy at the store, like groceries. A surge in oil prices could be problematic, but given the prior slump, it's unlikely that will be an issue anytime soon. 

The bottom line

After its best month in more than 30 years, the S&P 500 fell 2.8% to start the month of May. Experts caution that there's likely to be continued turbulence ahead, especially with earnings season still in full swing. Meanwhile, coronavirus-related news and its toll on economic growth will dominate the news on Wall Street for the foreseeable future, especially as with reopening underway in various states.

When it comes to your portfolio, though, it's important to keep a long-term perspective and avoid making emotional decisions. That's because some people on Wall Street are optimistic about the prospects for stocks in 2020 and believe the worst of the declines has passed.

Finally, it's important to remember that downturns can benefit long-term investors and selling during a decline could be the biggest mistake of your investing career. In fact, right now could be a "real opportunity to create wealth."

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