ADP employment expected to show a solid increase — The market consensus is for today’s June ADP employment report to show a solid increase of +188,000, although that would be down from May’s strong report of +253,000 jobs. The ADP report has been strong in recent months with a 3-month average monthly gain of +227,000 jobs.
The Labor Department’s payroll report, by contrast, has been substantially weaker than the ADP report. Payrolls have shown an average monthly increase in the past 3 months of only +121,000 (March +50,000, April +174,000, May +138,000). The consensus for Friday’s June payroll report is for an increase of +177,000, which would be closer to the 12-month trend average of +189,000. The recent weakness in the March-May payroll reports has raised some questions about the strength of the U.S. economy. Still, a downshift in hiring is not surprising given that the economy is now near full employment after producing 16.4 million jobs since the Great Recession.
Unemployment claims remain favorable near decade-plus lows — The U.S. unemployment claims data shows that layoffs remain near decade-plus lows, indicating a strong labor market where businesses are holding on to their current employees. The initial claims series is only +17,000 above the 44-year low of 227,000 posted in February and the continuing claims series is only +49,000 above the 29-year low of 1.899 million posted in May. The market consensus is for today’s initial claims report to show a small -1,000 decline to 243,000 (after last week’s +2,000 to 244,000) and for continuing claims to show a -8,000 decline to 1.940 million (after last week’s +6,000 increase to 1.948 million).
U.S. ISM non-manufacturing index expected to show a modest decline but remain generally strong — The market consensus for today’s June ISM non-manufacturing index is for a decline of -0.4 to 56.5, adding to May’s -0.6 point decline to 56.9. Expectations for a decline in today’s ISM index are based in part on the already-reported news that Markit’s preliminary-June U.S. services PMI fell by -0.6 points to 53.0. Today’s final-June Markit U.S. services PMI is expected to be left unrevised from the early June level of 53.0.
Despite expectations for a -0.4 point decline today, the ISM non-manufacturing index remains in relatively strong shape at only -0.6 points below the 1-1/2 year high of 57.6 posted in February. U.S. business confidence has recently cooled somewhat following the post-election surge, but still remains in decent shape with businesses still expecting a relatively strong economy.
Thu US 0700 ET Weekly MBA mortgage applications, previous -6.2% with purchase sub-index -4.1% and refi sub-index -8.6%.
0730 ET Jun Challenger job cuts, May +9.7% y/y.
0815 ET Jun ADP employment change expected +185,000, May +253,000.
0830 ET Weekly initial unemployment claims expected unch at 244,000, previous +2,000 to 244,000. Weekly continuing claims expected -8,000 to 1.940 million, previous +6,000 to 1.948 million.
0830 ET May trade balance expected -$46.3 billion, Apr -$47.6 billion.
0945 ET Final-Jun Markit services PMI expected unrevised at 53.0, prelim-Jun -0.6 to 53.0.
1000 ET Jun ISM non-manufacturing PMI expected -0.4 to 56.5, May -0.6 to 56.9.
1000 ET Fed Governor Jerome Powell delivers a speech on “the Case for Housing Finance Reform†at an American Enterprise Institute event in Washington, D.C.
1100 ET EIA Weekly Petroleum Status Report.
1100 ET Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Jul 11-13.
1930 ET Fed Vice Chair Stanley Fischer speaks on government policy and labor productivity (Q&A to follow).
GER 0200 ET German May factory orders expected +1.9% m/m and +4.5% y/y, Apr -2.1% m/m and +3.5% y/y.
0330 ET German Jun Markit construction PMI, May +0.7 to 55.3.
CAN 0830 ET Canada May building permits expected +1.0% m/m, Apr -0.2% m/m.
JPN 2000 ET Japan May labor cash earnings expected +0.4% y/y, Apr +0.5% y/y. May real cash earnings expected -0.1% y/y, Apr unch y/y.
EUR 0730 ET ECB account of its Jun 8 monetary policy meeting.
1200 ET ECB Governing Council members Jens Weidmann and Ewald Nowotny discuss the future of the euro at an event in Vienna.
7/6/2017 11:00 DOE U.S. Crude Oil Inventories 30-Jun — 118k
7/6/2017 11:00 DOE Cushing OK Crude Inventory 30-Jun — -297k
7/6/2017 11:00 DOE U.S. Gasoline Inventories 30-Jun — -894k
7/6/2017 11:00 DOE U.S. Distillate Inventory 30-Jun — -223k
7/6/2017 11:00 DOE U.S. Refinery Utilization 30-Jun — -1.50%
7/6/2017 11:00 DOE Crude Oil Implied Demand 30-Jun — 17249
7/6/2017 11:00 DOE Gasoline Implied Demand 30-Jun — 10199.6
7/6/2017 11:00 DOE Distillate Implied Demand 30-Jun — 5414.9
7/6/2017 11:00 DOE Total Fuel Ethanol Inventory 30-Jun — 21838k
7/6/2017 11:00 DOE Fuel Ethanol Total Production 30-Jun — 1015k