Week in Review: July 6, 2021

Nonfarm payrolls added 850K jobs in June, the strongest growth in 10 months and significantly better than the consensus estimate of 700K. Similar to the past several months, leisure and hospitality saw large gains, adding 343K new workers. However, the sector still needs to add an additional 2.2M jobs in order to return to February 2020 levels.

Manufacturing activity, as measured by industry group ISM, slowed in June but remained solid in expansion territory. Notably, employment slowed to 49.9, just below the breakeven level of 50.  Many companies noted that they continue to experience significant difficulty attracting and retaining labor. Reflecting the effects of higher prices stemming from the current disruption to global supply chains and the attendant cost increases, prices paid by manufacturers set a new record high dating back to 1979.

Consumer confidence rose to its highest level in 16 months driven by increases in both the present situation and expectations components. Often viewed as a leading indictor of future spending, the rise in the index bodes well for 3Q21 GDP. Overall, the proportion of respondents planning to purchase homes, vehicles and major appliances all rose.

Bucking the recent slowing trend in housing data, pending home sales jumped 8% in May, the largest increase in 11 months. That came on the heels of a nearly 4.5% decline in April and highlighted the often volatile nature of housing data.

Weekly jobless claims fell from 51K to 364K, a new pandemic low.