- Continuing Claims rose to 2455K versus estimates of 2408K and 2403K prior.
- ISM Non-Manufacturing for June fell to 57.0 versus estimates of 59.0 and a reading of 60.1 in May.
- Pending Home Sales for May rose 1.3% versus estimates of unch. and a 3.6% decline in April.
BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits fell last week, evidence of a healthy labor market, Bloomberg said. The four-week moving average of claims rose to 308,500 from 306,000 the prior week. The monthly payrolls report tomorrow is expected to show 170,000 new jobs in June, more than double the prior month. Moreover, Automatic Data Processing(ADP) is projecting a 368,000 increase in payrolls for June. The insured unemployment rate, which tracks the US unemployment rate, remained at 1.9%. I continue to believe the labor market will remain healthy over the intermediate-term without generating substantial unit labor cost increases. I expect tomorrow’s jobs report to modestly exceed estimates of 170,000.
Service industries in the US expanded at a slower pace last month as the housing market cooled, Bloomberg reported. The order backlogs component of the index rose to 55.5 versus 52 the prior month. The employment component of the index fell to 52 from 58 prior. The Prices Paid component fell to 73.9 versus 77.5 the prior month. I expect ISM Non-manufacturing to continue to decelerate as consumer spending slows to more average levels.
Contracts to buy previously owned homes in the US rose for the first time in four months in May, suggesting the slowdown in housing will be moderate, Bloomberg said. Pending resales rose 9.9% in the West and .6% in the Midwest. They fell 1.7% in the South and .6% in the Northeast. The national median existing-home price will probably rise 5.3% this year, according to the National Assoc. of Realtors said on June 6. This number provides more evidence that housing is only slowing to more healthy sustainable levels.
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