Good Signs for Friday’s Employment Report
We are getting our first peek into economic data from the month of May this week, and so far it looks good, says Bob Hughes, senior research fellow at the American Institute for Economic Research.
That bodes well for Friday’s employment report, which is one of the key indicators of the strength of the economy.
The most positive of this data was auto sales. Today, AutoData estimated unit auto sales during May at an annual rate of 17.8 million, the strongest rate since July 2005, and a nice rebound after a few softer months, Hughes said. “It’s a good sign for consumer spending,” Hughes said.
Manufacturers reported higher activity during the month. The Institute for Supply Management’s manufacturing index rose in May to 52.8, as new orders at factories, as well as employment at factories, both increased.
But it wasn’t all good news from ISM. Its non-manufacturing index, which measures the service sector, showed slowing growth, falling to 55.7. Nevertheless, both indexes remained solidly above 50, which is a good sign for American businesses, Hughes said.
ADP’s estimate of private payrolls, released this morning, showed a nice pickup from April, Hughes noted. Combined with very low initial claims for unemployment insurance, the data suggest “We could see a good employment report on Friday,” Hughes said.
Putting it all together, “it looks like the economy is doing better in the second quarter,” Hughes concluded.
