In May, the ADP employment report showed a decline in employment by 532 000, close to the consensus estimate of 525 000. More surprising was the downward revi-sion in the April figures (-545 000 from -491 000). The breakdown shows that em-ployment dropped by 267 000 in the goods producing sector, of which 149 000 in manufacturing, and by 265 000 in the service providing sector. Assuming that gov-ernment payrolls are broadly unchanged, the official payrolls might show a job loss of around 530 000, which is close to the consensus estimate. The May outcome and revisions to the April data might be a bit disappointing after the better than ex-pected figures in April.

The non-manufacturing ISM rose from 43.7 to 44.0 in May, slightly lower than an-ticipated. Looking at the details, business activity (42.4 from 45.2), new orders (44.4 from 47.0), backlog of orders (40.0 from 44.0), new export orders (47.0 from 48.5) and imports (46.0 from 48.5) deteriorated, while supplier deliveries (50.0 from 45.5), inventory change (47.0 from 43.0) and employment (39.0 from 37.0) improved. Prices paid rose from 40.0 to 46.9, while inventory sentiment stayed unchanged. The lower than expected non-manufacturing ISM might be a bit disappointed after the upward surprise in the manufacturing ISM.

In April, US factory orders rose by 0.7% M/M, while the consensus was looking for an increase by 0.9% M/M. The March figure was however sharply downwardly re-vised from -0.9% M/M to -1.9% M/M. According to the details, durable goods orders rose by 1.7% M/M, while non-durable orders dropped by 0.1% M/M. Most of the re-bound in durables was however defence related.


EMU: First quarter GDP confirmed at -2.5% Q/Q

The preliminary report of first quarter GDP confirmed the advance quarterly figure of -2.5% Q/Q, while the yearly figure was downwardly revised from -4.6% Y/Y to -4.8% Y/Y. Looking at the details, weakness was driven by a 4.2% Q/Q contraction in investments and another significant negative contribution came from the fall in inven-tories. Household consumption dropped by 0.5% Q/Q, while government consump-tion stayed flat in the first quarter. Both import and exports dropped, but the decline in exports (-8.1% Q/Q) was sharper than the decline in imports (-7.2% Q/Q).

In May, the final figure showed a marginal upward revision in services PMI. The headline index was adjusted to 44.8 from the 44.7 flash outcome and up from the April reading of 43.8. The most remarkable revision was to the outstanding business (42.4 from 41.6), while employment was downwardly revised.


Other: UK services PMI in expansionary territory

In the UK, services PMI jumped above 50, for the first time since April 2008. In May, the headline index rose from 48.7 to 51.7, while the consensus expected a figure of 49.5. Also the underlying picture brightened with significant improvements in new business, business expectations and employment. Looking at inflationary pressures, both input prices and prices charged showed slight declines. UK services PMI is now again in expansionary territory, which is a positive sign, but should be confirmed by “hard data”.