The US economy posted mixed data this afternoon, causing the US dollar index to give back its weekly gains and the stock market in the United States to post more gains.
Data this afternoon showed that private businesses in the US created 278,000 jobs in May of 2023, compared to a downwardly revised 291,000 in April and well above forecasts of 170,000.
On the wage front, pay increases slowed for both job changers (12.1% vs 13.1%) and job stayers (6.5% vs 6.7%). Nela Richardson, chief economist, ADP, said that “Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring”,
The US economy also posted manufacturing data this afternoon The ISM Manufacturing PMI in the United States fell to 46.9 in May of 2023 from 47.1 in April, compared to forecasts of 47.
The reading pointed to a seventh consecutive month of contraction in the manufacturing sector, as companies. Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee said “manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. However, there is clearly more business uncertainty in May“.
More disappointment as the S&P Global US Manufacturing PMI was revised slightly lower to 48.4 in May of 2023 from a preliminary of 48.5, pointing to the biggest decline in the health of the manufacturing sector for three months.
The drop was driven by a solid contraction in new orders amid muted demand conditions. Efforts to run down stocks were met by a steeper contraction in purchasing activity, hinting at lower production growth in coming months.
Sharply falling demand for inputs contributed to an unprecedented improvement in vendor performance, adding to the worries about the sector slipping deeper into contraction.