It was a slow week for data, especially at the state and local level. Nationally, the news was again favorable. Employment has continued to improve. The unemployment rate continued to decline. Although both of these series were below what would normally be expected, they suggest that the economy is on a slow, sustainable path for the near and intermediate term. Both the manufacturing and nonmanufacturing sectors continued to expand as did auto and light truck sales. Construction spending was up as well. Again, due to the short holiday week, nothing significant was reported at the state level.
U.S. Snapshot:
The labor market appears to be gaining momentum. Total nonfarm jobs increased 288,000 in June after a 224,000 gain in May and a 304,000 rise in April. The net revision for the prior two months was up 29,000. The consensus forecast for June was 211,000. For June, 262,000 private sector jobs were created while government jobs jumped 26,000.
The unemployment rate surprisingly fell to 6.1% in June from 6.3% in May. This is the lowest level since September 2008. The underemployment rate decreased slightly in June to 12.1% from 12.2% in May.
The labor force participation rate held steady at 62.8% in June.
According to the ISM’s manufacturing index, economic activity in the manufacturing sector expanded in June for the 13th consecutive month and the overall economy grew for the 61st consecutive month. The index now stands at 55.3. A reading of 50 or above indicates expansion.
The ISM also reported that the nonmanufacturing sector grew in June for the 53rd consecutive month. That index now stands at 56.0.
Factory orders fell 0.5% in May, but, when excluding defense, orders rose by 0.2%. Yet, most orders do show a softening with orders for transportation equipment, electrical equipment, computers and machinery down. One big positive was the gain for nondefense capital goods excluding aircraft which is an important core reading for business investment.
Sales of autos and light trucks were up in June by 7.0% compared to a year ago and 1.2% over May. While the gains are slowing, this is still good news.
Arizona Snapshot:
Next week’s MMQ will report the statewide and local data that usually comes out on Friday.
