An improved tone in risk markets overnight pushed Treasury yields higher despite yesterday’s escalated trade tensions (U.S. announcement of steel tariffs against allies). Reduced political risks in Italy and Spain are contributing positively to today’s activity, and the May jobs report was better than expected. European equity indices are up 1-3%, and S&P 500 futures are currently up 13 points. On the trade front, temporary exemptions for recently announced steel tariffs had been in place for the European Union, Canada, and Mexico were unexpectedly allowed to expire yesterday. Not surprisingly, those countries suggested retaliatory actions may be in the works, but to this point, markets still aren’t overly concerned with an outright trade war. That said, there is growing confusion/uncertainty as to what the Trump Administration’s ultimate objective are with regards to trade negotiations with China, NAFTA, etc. given recent comments and actions from U.S. officials.
Nonfarm payrolls added 223,000 jobs in May (190,000 expected), and the headline unemployment rate fell another 10 bps to 3.8% (3.9% expected), the lowest since April 2000. The latter was boosted by a 293,000 increase in household employment, which significantly outpaced labor force growth for the month (+12,000). The U-6 underemployment rate fell another 20 bps to 7.6% (17-year low). The wage data in the establishment survey (nonfarm payrolls) was also positive. Average hourly earnings rose 0.3% m/m in May versus expectations for 0.2% growth, and the year-over-year metric rose to 2.7% (2.6% expected). Overall, this was another solid jobs report.
Jason Haley
Managing Director, Investment Management Group
| Date Time | Event | Survey | Actual | Prior | Revised |
| 05/29/2018 | S&P CoreLogic CS 20-City MoM SA | 0.75% | 0.53% | 0.83% | 0.84% |
| 05/29/2018 | S&P CoreLogic CS 20-City YoY NSA | 6.45% | 6.79% | 6.80% | 6.76% |
| 05/29/2018 | S&P CoreLogic CS 20-City NSA Index | — | 208.62 | 206.67 | 206.57 |
| 05/29/2018 | S&P CoreLogic CS US HPI NSA Index | — | 198.94 | 197.01 | 197.29 |
| 05/29/2018 | S&P CoreLogic CS US HPI YoY NSA | — | 6.53% | 6.34% | 6.51% |
| 05/29/2018 | Conf. Board Consumer Confidence | 128 | 128 | 128.7 | 125.6 |
| 05/29/2018 | Conf. Board Present Situation | — | 161.7 | 159.6 | 157.5 |
| 05/29/2018 | Conf. Board Expectations | — | 105.6 | 108.1 | 104.3 |
| 05/29/2018 | Dallas Fed Manf. Activity | 23.8 | 26.8 | 21.8 | — |
| 05/30/2018 | MBA Mortgage Applications | — | -2.90% | -2.60% | — |
| 05/30/2018 | ADP Employment Change | 190k | 178k | 204k | 163k |
| 05/30/2018 | GDP Annualized QoQ | 2.30% | 2.20% | 2.30% | — |
| 05/30/2018 | Personal Consumption | 1.20% | 1.00% | 1.10% | — |
| 05/30/2018 | GDP Price Index | 2.00% | 1.90% | 2.00% | — |
| 05/30/2018 | Core PCE QoQ | 2.50% | 2.30% | 2.50% | — |
| 05/30/2018 | Advance Goods Trade Balance | -$71.0b | -$68.2b | -$68.0b | -$68.6b |
| 05/30/2018 | Retail Inventories MoM | — | 0.60% | -0.40% | -0.70% |
| 05/30/2018 | Wholesale Inventories MoM | 0.50% | 0.00% | 0.30% | 0.20% |
| 05/30/2018 | U.S. Federal Reserve Releases Beige Book | ||||
| 05/31/2018 | Challenger Job Cuts YoY | — | -4.80% | -1.40% | — |
| 05/31/2018 | Personal Income | 0.30% | 0.30% | 0.30% | 0.20% |
| 05/31/2018 | Personal Spending | 0.40% | 0.60% | 0.40% | 0.50% |
| 05/31/2018 | Real Personal Spending | 0.20% | 0.40% | 0.40% | 0.50% |
| 05/31/2018 | PCE Deflator MoM | 0.20% | 0.20% | 0.00% | — |
| 05/31/2018 | PCE Deflator YoY | 2.00% | 2.00% | 2.00% | — |
| 05/31/2018 | PCE Core MoM | 0.10% | 0.20% | 0.20% | — |
| 05/31/2018 | PCE Core YoY | 1.80% | 1.80% | 1.90% | 1.80% |
| 05/31/2018 | Initial Jobless Claims | 228k | 221k | 234k | — |
| 05/31/2018 | Continuing Claims | 1733k | 1726k | 1741k | 1742k |
| 05/31/2018 | Chicago Purchasing Manager | 58.3 | 62.7 | 57.6 | — |
| 05/31/2018 | Bloomberg Consumer Comfort | — | 55.2 | 55.2 | — |
| 05/31/2018 | Pending Home Sales MoM | 0.40% | -1.30% | 0.40% | 0.60% |
| 05/31/2018 | Pending Home Sales NSA YoY | — | 0.40% | -4.40% | -4.30% |
| 06/01/2018 | Change in Nonfarm Payrolls | 190k | 223k | 164k | 159k |
| 06/01/2018 | Two-Month Payroll Net Revision | — | 15k | — | — |
| 06/01/2018 | Change in Private Payrolls | 190k | 218k | 168k | 162k |
| 06/01/2018 | Change in Manufact. Payrolls | 20k | 18k | 24k | 25k |
| 06/01/2018 | Unemployment Rate | 3.90% | 3.80% | 3.90% | — |
| 06/01/2018 | Underemployment Rate | — | 7.60% | 7.80% | — |
| 06/01/2018 | Average Hourly Earnings MoM | 0.20% | 0.30% | 0.10% | — |
| 06/01/2018 | Average Hourly Earnings YoY | 2.60% | 2.70% | 2.60% | — |
| 06/01/2018 | Average Weekly Hours All Employees | 34.5 | 34.5 | 34.5 | — |
| 06/01/2018 | Labor Force Participation Rate | — | 62.70% | 62.80% | — |
| 06/01/2018 | Markit US Manufacturing PMI | 56.6 | — | 56.6 | — |
| 06/01/2018 | Construction Spending MoM | 0.80% | — | -1.70% | — |
| 06/01/2018 | ISM Manufacturing | 58.2 | — | 57.3 | — |
| 06/01/2018 | ISM Employment | — | — | 54.2 | — |
| 06/01/2018 | ISM Prices Paid | 78 | — | 79.3 | — |
| 06/01/2018 | ISM New Orders | — | — | 61.2 | — |
| 06/01/2018 | Wards Releases May Auto Data — Excluding GM | ||||
| 06/01/2018 | Wards Total Vehicle Sales | 16.70m | — | 17.07m | — |