US Job and Wages Growth Improved
US job gains were strong in June. Wages growth picked up as well. Today, the key release is Nonfarm Payrolls. These reports altogether determine Q2 economic growth and Fed’s rate hike path.
US ADP private employment marked 177 thousand, while the forecast suggested 180 thousand. Employment component of ISM manufacturing reduced -0.3 to 56.0. Employment component of ISM non-manufacturing fell -0.5 to 53.6. Initial unemployment claims averaged 221.25 thousand in June, holding at its all-time minimum. Conference board consumer confidence declined to 126.4 from 128.8.
Yesterday’s FOMC protocol noted that hiring was sustained, unemployment rate dropped, growth of household spending improved, business fixed investment rose in a steady pace, headline and core inflation were on track to 2%. But, long term-inflation expectations were little changed as: “Members viewed the recent data as consistent with a strong economy that was evolving about as they had expected.”
The US-China trade war was also mentioned as harming the investments. But, the real victim is likely to be manufacturing sector. Manufacturers are projected to have hired another 15,000 workers to their payrolls in June, adding to 18,000 jobs created in May. Construction payrolls are expected to have added 25,000 in May. Payrolls in government employment increased 5,000 jobs in May.