Registered Investment Adviser Caleb Lawrence
Better than expected economic data overcame trade sanction retaliation and growing European political and financial uncertainty sending the major averages into the final hour with large gains. Since Tuesday the Standard and Poors 500 Index is up 31 points or 1.1%, while the NASDAQ has gained 157 points or 1.2%.
The Bureau of Labor Statistics or BLS reported 223,000 new jobs in May, beating expectations and pushing the unemployment rate down to 3.8%. The average work week was unchanged at 34.5 hours, average hourly earnings increased a respectable .3%. The previous 2-months were revised up by 15,000 jobs in total. While today’s employment report was a solid one and the best showing in 3-months. The 3-month moving average of job creation slipped to 179,000 a 6-month low.
Construction spending beat expectations in April with a 1.8% gain on strength in residential construction. That said today’s solid gain simply erases the previous month’s large decline, so it means little.
The Institute for Supply Management Manufacturing Index advanced 1.4 points to 58.7 in May. The details were unremarkable, price data increased again and remains very high. That said recent price and inflation data has moderated somewhat and seems to be settling in around the Fed’s desired 2% target.