[B]US data has been disappointing. The weekly initial jobless claim increase has been followed by a weaker than expected ISM manufacturing report.[/B] The ISM fell to 56.2 from 59.7. The consensus had anticipated a smaller decline to 59. Weakness was especially pronounced in new orders, which fell to 58.5 from 65.7 Employment eased to 57.8 from 59.8. Prices paid fell dramatically to 57.0 from 77.5. On the other hand, construction spending was not as soft as expected. The 0.2% decline contrasts with expected for a 0.8% fall after the 2.3% jump in April, the biggest increase since 2000. Residential outlays fell 0.4% and non-residential construction slipped 0.1%. Public works rose 0.4% after 1.6% gain in April. The National Association of Realtors’ index for pending sales of existing homes dropped to 77.6 from 110.9 in April, the industry group said Thursday. While expected, the drop is steeper than the 13% economists surveyed had forecast. Pending home sales in May are down 15.9% from May 2009.
[B]Nonfarm payrolls fell by 125,000 in May, as 225,000 government workers that were hired for the 2010 census in recent months lost their temporary jobs, according to the U.S. Labor Department.[/B] 83,000 private-sector jobs were added last month. In May, nonfarm payrolls had surged by 433,000, boosted by the census hiring. The May figure was revised slightly from a previously reported 431,000 increase. Economists were expecting payrolls to drop by a more modest 110,000 in June. Taking into account revisions to prior months, the U.S. economy added an average of around 150,000 jobs a month in the first half, a level that is still not strong enough to bring unemployment down significantly. The unemployment rate fell to 9.5% from 9.7%, but this likely reflects people dropping out of the labor market. The workweek fell 0.1%, which is the equivalent of about 30 thousand job loss. The private sector 83k jobs and the May data were revised to show only 33 thousand from 41 thousand. Hourly earnings fell 0.1%. Bottom line then is few man-hours of work, fewer jobs and less income.
Analysis provided by Exto Capital