Market Matters , July 6, 2019 Edition

ISM Manufacturing
ISM Manufacturing for June came in above expectations at 51.7; however, the index is down -.4 points from May. This is now the third straight monthly decline and the lowest reading since back in October 2016.

ADP Employment
June ADP employment rose by +102k vs. expectations of an increase of +140k. May, originally posted at +27k, was revised higher to +41k. In the past, ADP has never really been that much of an accurate measure to what the BLS (Bureau of Labor Statistics) actually print on headline payrolls; however, the 12-month average difference is under 60k now.
Trade Deficit
The Trade Balance in May widened to $55.5bln from a previously revised $51.2bln (initially posted at $50.8bln). Looking at trade flows, we see positive numbers as imports rose by +3.3% and exports rose by +2%. While this is a positive sign for global economies, a wider deficit will add pressure and possibly drag down GDP Q2 growth in the States.

ISM Non-Manufacturing
ISM Non-Manufacturing for June came in lower than expected, posting at 55.1 vs. a 56 consensus number. This is now the lowest level since back in July 2017. A lot of details here were mixed but we do see employment dropping the most since early last year from 58.1 to 55.

June Employment Report
Payrolls for June came in higher than expectations, posting up +224k vs. 160k consensus. If we look at payrolls over Q2 now, the average is still a strong +171k, suggesting that there is no substantial weakness in job growth. The household survey proved strong as well, and while the unemployment rate ticked up, so did the participation rate, 3.7% and 62.9% respectively. The +.2% increase in average hourly earnings was a bit soft, but with a positive revision to last month’s print, the
year-over-year wage growth now sits at +3.1%.

Pam Jamison


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