Review of US data ahead of tomorrow's NFP
While we are waiting to see the Friday' May employment reports, today's Initial Jobless claims, and ADP, after yesterday's JOLTs, turning on the alarms to be more cautious about Non-farm Payroll numbers.
Wednesday, JOLT's numbers showed more than 11.4M empty left job opportunities, proof of the complex situation of the labor market. In line with employment numbers, Yesterday's US economic data from Markit showed that the manufacturing PMI in May was recorded at 57.0, lower than market expectations, and the previous month at 57.5. Wednesday, the manufacturing PMI was also released by ISM to show a slight recovery to 56.1, up from 55.4.
Today we had more information about the employment puzzle. At first, ADP Nonfarm Employment Change in May at 128K missed the 300K estimates, while Initial Jobless Claims, falling back towards 200K, printed the second week in a row reducing after one month of missing estimates. The overall perspective from the published employment data shows a node in the labor market situation. Unfiled job vacancies are twice more than unemployed, which is not good.
Besides employment data, we have to be careful about other economic data. Yesterday we had the Fed's Beige Book. According to the published report by Beige book, Fed expressed unease about a broad economic slowdown. The Atlanta Fed lowered its second-quarter GDP growth forecast to 1.3%, from 1.9% previously. FOMC's main concern now must be Stagflation because, despite signs of slowing economic growth, members are also looking after more tightening policies. Along with Atlanta Fed President Bostic, other Fed officials such as Waller, Bullard, Daly Dudley, etc., have refuted speculation that the Fed will stop raising interest rates in September. The most hawkish member, Bullard, said he hoped policymakers would help lower inflation to target by raising interest rates to 3.5 percent this year.
As the data are cluttered, the investors are also worried about the future. We can see these fears and concerns in the below Nasdaq H1 figure, as it is again trying to fall back under the 12,500 key level. Technical indicators also remain bearish. The price fell back under 20 HMA, MACD histograms formed under 0-level, and the market volume increased. 12,250 and then 11,900 are the following support levels. On the flip side, 12,900 can open the doors for higher levels.
