- Initial Jobless Claims for last week rose to 318K versus estimates of 315K and 316K prior.
- Continuing Claims rose to 2569K versus estimates of 2503K and 2485K prior.
- ISM Non-Manufacturing for June rose to 60.7 versus estimates of 58.0 and 59.7 in May.
BOTTOM LINE: First-time claims for jobless benefits barely rose last week, remaining at a level that points to strength in the US labor market, Bloomberg reported. The four-week moving-average of jobless claims rose to 318,500 from 316,750 the prior week. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, rose to 2.0% from 1.9% the prior week. However, the ADP Employment Change report showed US companies added 150,000 jobs in June, the biggest gain in seven months. As well, Challenger Job Cuts fell 17% in June, according to another report today. I suspect tomorrow’s non-farm payrolls report will likely show a gain of around the estimate of 125,000.
Growth in US service industries unexpectedly accelerated to the fastest pace in 14 months in June, reinforcing evidence the economy picked up steam last quarter, Bloomberg said. The Employment component of the index rose to 55.0, the highest since May 2006. The New Orders component fell to 56.9 from 57.4 in May. The Prices Paid component fell to 65.5 from 66.4 in May. The Inventories component fell to 52.5 from 61 the prior month. I suspect the service sector will weaken modestly over the next couple of months before strengthening again in 4Q.
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