Commentaries

July 05, 2019

June nonfarm payrolls of +224K beat estimates of +160K. The three-month payroll average of 171K was the highest reading since March. Average hourly earnings were weaker than expected, +0.2% month-over-month (est. +0.3%) and +3.1% year-over-year were both unchanged from May. Unemployment rate ticked up to 3.7% (est. +3.6%). Labor force participation rose to 62.9%. The Fed was in sharp focus at the end of the week as the CME Fedwatch plunged from a ~29% chance of a 50bp cut in July to 0% after the report. Goldman Sachs analysts said the report doesn't do much to change Fed's dovish pivot, saying cuts will most likely occur.
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June 28, 2019

In May, U.S. personal income was up 0.5% month-over-month vs consensus for a 0.3% rise; slower than April's 0.5% pace. May personal consumption expenditures were up 0.4% month-over-month, a bit lower than consensus for 0.5% and April's upwardly revised 0.6% pace (was up 0.3% m/m). Core PCE Price Index up 1.6% year-over-year, above 1.5% consensus. Elsewhere, final June consumer sentiment level was down to 98.2, better than preliminary 97.9, but down from May's 100.0. Release noted slump entirely due to households in top third of income distribution, who frequently mentioned tariffs. June Chicago PMI came in at 49.7 vs consensus 54.0 and April's 54.2. The June reading is the lowest level since February 2016.
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