Economic Score Card in Advance of June Employment Report
Even if one had a crystal ball, it would be difficult to sort through the mixed signals coming from the economy of late. There are more positive than negative indicators. However, the negative indicators are fewer, but they are important. So what does all of this mean?
The consensus forecast among economists is the Labor Department’s Jobs Report on Friday will show that 150,000 – 170,000 new jobs were created in May, and the unemployment rate remained constant at 8.1%.
The Gazelle Index staff believes the high end of the new jobs estimate is correct, i.e. 170,000 jobs. However, the unemployment rate should decline to 8.0% for the following reasons.
The positive indicators are stronger than are the negative ones. Most importantly, improvements in the housing sector, consumer confidence and spending and auto purchases should be reflected in an increase in employment and reduction in the unemployment rate.
The positive and negative indicators are listed below.
Recent Positive Indicators:
- Housing Starts- up
- New Home Sales – up
- Home Prices – up
- Durable goods purchases – up
- Consumer Confidence – up
- Residential Investment- up
- Industrial Production – up
- New claims for unemployment insurance -down
- Domestic oil prices – down
- ADP Advanced Report of Jobs Created – up
Recent Negative Indicators:
- GDP revised estimate of 1st qt. growth – down
- Private investment expenditures – down
- Retail sales – lower
- Index of Leading Indicators – down
- Euro zone debt crisis – worse