The latest economic updates are revealing a mixed picture for both the U.S. and global economies. Some indicators show stability, while others raise concerns about potential issues ahead.
- US jobless claims remain steady, decreasing by 8,000 to reach 276,000 | MarketWatch
- Weak U.S. productivity alongside rising labor costs raises inflation worries | Reuters
- U.S. Consumer Comfort Index drops to a six-month low | Bloomberg
- German factory orders show an increase for the second consecutive month | NY Times
- Bundesbank significantly raises growth forecasts for Germany | MNI
- Eurozone retail PMI in May indicates the strongest sales growth since 2011 | Markit
- Greece postpones IMF payment as Merkel warns that a resolution is still distant | Bloomberg
For May, private nonfarm payrolls in the U.S. are estimated to grow by 178,000 (seasonally adjusted), according to The Capital Spectator’s median forecast derived from multiple econometric estimates. This figure indicates a slight decrease compared to April’s gain of 213,000.
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Discussions about a potential recession have become increasingly common, although much of this dialogue relies on anecdotal evidence. Thankfully, there are several reliable metrics founded on solid data and robust modeling techniques to gauge this risk. One of these methods frequently features on The Capital Spectator (refer to last month’s update). However, even the best practices in analysis can encounter delays. Fresh data for certain indicators often takes a month or two to be available, typically reflecting past trends. Revisions to earlier reports can also change the signals we receive. To bridge this gap, utilizing market data—available in real-time and resistant to revisions—can offer timely insights.
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In May, U.S. companies added 201,000 jobs, according to the ADP National Employment Report | LA Times
US trade deficit shrinks significantly to $40.9B in April | USA Today
Job Creation Index for the U.S. inches up to a new high in May | Gallup
U.S. service sector experiences slowest growth in over a year during May: ISM | RTT
Service sector activity growth in the U.S. slows down in May: PMI | Markit
Global employment rises at the fastest rate since late 2007: PMI | Markit
The ADP National Employment Report reveals that U.S. companies added 201,000 jobs in May, marking a noticeable rise from April’s increase of 165,000. Despite modest economic growth, this update suggests that the risk of a recession remains low in the U.S. The report also lends credence to expectations for an encouraging official jobs report from Washington later this week.
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In May, the anticipated risk premium for the Global Market Index (GMI) edged upward, marking its first increase in four months. The GMI—a diversified, market-value weighted blend of major asset classes—is projected to yield an annualized 3.9% over the “risk-free” rate in the long run. The latest estimate, reflecting data through last month’s close, rose 20 basis points from the prior projection.
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U.S. auto sales surged to their fastest pace in nearly a decade during May | Reuters
U.S. factory orders decline for the eighth time in nine months in April | MarketWatch
OECD revises down its global growth prospects as investment lags | Bloomberg
Eurozone growth slows slightly in May: PMI Composite Index | Markit
German yields continue to rise due to inflation and concerns over Greece | Reuters
China’s service sector experiences the most significant increase in new orders in three years: PMI | Markit
The ADP Employment Report suggests a projected increase of 167,000 (seasonally adjusted) in private nonfarm payrolls for May. This estimate is slightly lower than the rise recorded in April.
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According to various prominent analysts, predictions of an impending U.S. recession are becoming prevalent. However, insights from the Treasury market seem to tell a different story.
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Consumer spending in the U.S. remained unchanged in April, although higher incomes led to an increase in savings | USN&WR
The U.S. ISM manufacturing index rises slightly to 52.8%, surpassing expectations | MarketWatch
Global manufacturing growth shows a slight uptick in May: PMI | Markit
The increase in U.S. manufacturing orders has slowed to its lowest rate in almost 18 months | Markit
Eurozone consumer prices rise year-over-year in May for the first time in six months | WSJ
German unemployment declines in May | RTT
Discussions continue regarding Greece’s debt crisis as deadlines approach | BBC
