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NFIB: Small Business Optimism Dipped in June after Rebounding in Prior Two Months

The National Federation of Independent Business (NFIB) said that optimism dipped in June after rebounding in the prior two months. The Small Business Optimism Index declined from 98.3 in May to 94.1 in June, its lowest level in 15 months. As such, it suggests that sentiment has once again moved in the wrong direction, reversing signs of progress in April and May. In addition, it remained below the peak observed in December (100.4), which was the highest level since October 2006. The percentage of respondents suggesting that the next three months would be a “good time to expand” dropped from 14 percent to 9 percent, with economic conditions and the political climate cited as the top concerns for those suggesting that was not the right time for expansion. (continue reading…)

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Retail Sales Pulled Back Again in June

The Census Bureau said that retail sales fell by 0.3 percent in June, pulling back from the 1.0 percent gain seen in May. The decline was unexpected, with a consensus anticipation of a slight increase. It was the first decrease in retail spending since February, and it suggests that the public continues to remain somewhat cautious in their willingness to open their pocketbooks. The year-over-year pace was a disappointing 1.4 percent, down from 2.3 percent in May and well below the 4.7 percent rate observed in November. (continue reading…)

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JOLTS: Manufacturing Job Openings at their Highest Levels in Nearly 8 Years

The Bureau of Labor Statistics said that manufacturing job openings neared an 8-year high in May. The Job Openings and Labor Turnover Survey (JOLTS) release noted that job posting in the sector rose from 335,000 in April to 347,000, the highest level since July 2007. This continues an upward trend for openings among manufacturers, with an average of 332,000 through the first five months of 2015, up from an average of 290,000 for all of 2014. More importantly, it could indicate stronger hiring activity moving forward, which has been quite weak so far this year, mirroring softer economic data in general. (continue reading…)

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U.S. Trade Deficit Edged Slightly Higher in May, Oil Imports at Lowest in 13 Years

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged slightly higher, up from $40.70 billion in April to $41.87 billion in May. The deficit has been highly volatile so far this year, ranging from $37.25 billion in February to $50.57 billion in March, but the year-to-date average of $42.57 billion in 2015 is nearly identical to the $42.36 billion average observed in all of 2014. The May increase stemmed largely from a decline in goods exports (down from $129.34 billion to $127.72 billion) that more than offset the decrease in goods imports (down from $189.65 billion to $189.23 billion). At the same time, the service sector trade surplus inched up marginally from $19.62 billion to $19.64 billion. (continue reading…)

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Manufacturing Employment Increased by 4,000 in June

The Bureau of Labor Statistics said that manufacturers added 4,000 net new workers in June. This was slightly lower than the 7,000 additional employees added in May, and in general, it continues a softer-than-desired pace for the first half of 2015, particularly over the past five months. The sector added an average of just 6,167 workers per month in the first half of this year, a much slower rate of hiring than observed in the second half of 2014, which averaged 20,667 per month. The good news is that manufacturing job gains were positive in both May and June, recovering from being flat in April. (continue reading…)

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Manufacturing Construction Spending Continued to Rise Sharply in May

The Census Bureau said that private, nonresidential manufacturing construction spending rose sharply, up 6.2 percent in May to an annualized $89.69 billion. This represents a significant shift upward over the past year in construction activity for the sector, up from $52.73 billion in May 2014 and $65.68 billion in December 2014. On a year-over-year basis, manufacturing construction has increased by a whopping 70.1 percent. Moreover, the current level is yet another all-time high for this data series, suggesting that manufacturers are confident enough in their outlook to warrant additional investments. (continue reading…)

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ISM: Manufacturing Activity Picked Up Somewhat in June

The Institute for Supply Management’s manufacturing purchasing managers’ index picked up a little in June. The headline PMI increased from 52.8 in May to 53.5 in June, returning to a level last seen in January. As such, this report indicates that manufacturing activity has begun to recover from the softer demand, output and hiring levels experienced earlier in the year, with a number of economic headlines challenging the sector. Still, that does not mean that manufacturers are out of the woods yet, with activity expanding at a slower pace than desired. To illustrate this point, the manufacturing PMI averaged 56.9 in the second half of 2014, but has averaged 52.6 through the first six months of 2015. (continue reading…)

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ADP: After Three Months of Employment Declines, Manufacturing Hiring Ticked Higher in June

ADP said that manufacturing employment rose by 7,000 in June, ending a three-month period of declines in hiring for the sector. This is welcome news, as it suggests that job growth has begun to recover from weaker economic conditions earlier in the year. Year-to-date, the manufacturing sector has added just 8,000 workers on net. This compares to 164,000 net new jobs generated in 2014, or an average of roughly 13,650 per month. Hopefully, we will return to a similar pace as we move into the second half of 2015.

In the larger economy, nonfarm private businesses added 237,000 workers in June, extending the 203,000 gain observed in May. Nonfarm payrolls have risen by 200,000 or more in 15 of the past 17 months, with the exceptions being in March and April of this year. As with the manufacturing data described above, this indicates a rebound from springtime softness in the overall labor market. (continue reading…)

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Conference Board: Consumer Confidence Jumped Higher in June

The Conference Board said that consumer sentiment jumped higher in June. The Consumer Confidence Index increased from 94.6 in May to 101.4 in June, matching its level of March and coming after two months of softness in the data. Sentiment continues to remain below the post-recessionary peak observed in January (103.8), but overall, this report suggests that Americans’ attitudes have rebounded from weaknesses earlier in the year. In addition, confidence has risen from one year ago when the index was 86.4. Despite these improvements, the public continues to remain somewhat anxious about labor and income growth. (continue reading…)

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Dallas Fed: Texas Manufacturers Contracted for the Sixth Straight Month

The Dallas Federal Reserve Bank said that manufacturing activity contracted in its Texas district for the sixth straight month. Nonetheless, the pace of decline eased a bit in June, with the composite index of general business conditions increasing from -20.8 in May to -7.0 in June. While this might represent some progress, the larger headline is that this index has been negative in each month so far in 2015, mainly due to lower crude oil prices. With that said, there might be a sense of stabilization. As one fabricated metal products manufacturer said in the sample comments, “Signs of some stability in oil and gas exploration and production are emerging. If that continues, then our business conditions will benefit in the coming months.” (continue reading…)

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