• Home ::
• Fundamental ::
• Analysis Reports ::
• KBC News Picks

• Send
• Print
• Add To
• Rss

KBC News Picks

5e834e5a-586b-4a4a-beb0-4191e4833b8d

1

0

US: ADP employment report disappoints in June

Thu, Jul 2 2009, 08:14 GMT
by KBC Market Research Desk

KBC Bank

In June, the ADP employment report showed a decline in US private employment by 473 000, significantly higher than the expected -394 000. Looking at the details, 250 000 jobs were lost in the goods-producing sector, of which 146 000 in manufac-turing. In service providing, employment fell by 223 000. In construction, employment dropped by 97 000, the twenty-ninth consecutive decline and in the financial sector, employment declined by 29 000, the nineteenth consecutive monthly decline. The outcome is a bit disappointing, but after the revised ADP approach, the link be-tween the BLS and ADP report is a bit unclear.

In June, the manufacturing ISM rose from 42.8 to 44.8, close the consensus esti-mate of 44.9. The breakdown shows a significant improvement in production (52.5 from 46.0), employment (40.7 from 34.3) and imports (46.0 from 42.5), but also sup-plier deliveries and new export orders improved. New orders (49.2 from 51.1), back-log of orders (47.5 from 48.0), inventories (30.8 from 32.9) and customer inventories (43.5 from 46.0) deteriorated. The underlying picture is mixed with deterioration in new orders, while production rose into expansionary territory.

In May, US pending home sales rose for the fourth consecutive month (0.1% M/M), while the consensus was looking for a flat figure. The previous figure was upwardly revised to 7.1% M/M. Looking at the details, sales rose in the Northeast and West, while they declined in the Midwest and South. This outcome confirms the recent signs that the US housing market is bottoming out.

EMU: Slight upward revision in manufacturing PMI

In the euro zone, the final figure of June manufacturing PMI showed a slight upward revision compared to the first estimate. The headline index was upwardly adjusted from 42.4 to 42.6, partially due to an increase in new orders from 44.59 to 44.93. The national data showed upward revisions in Germany and France and a stronger than expected rise in Italy.

Other: UK manufacturing PMI extends recovery in June

In June, UK manufacturing PMI rose from 45.4 to 47.0, slightly above the consen-sus estimate of 46.4. Looking at the details, the improvement was led by an increase in output from 48.1 to 52.1, the first reading above 50 since March 2008. But also new orders (48.9 from 48.3) and employment (40.9 from 38.9) increased. Both input and output prices rose but remained below the benchmark level of 50. The bigger than expected improvement in the UK manufacturing ISM is an encouraging sign, but the headline index remains still below 50, which indicates that activity is still contracting.

• Download Full Sunrise Market Commentary KBC News Picks

Published on  Thu, Jul 2 2009, 08:21 GMT