NFP leading indicators: ISM Manufacturing PMI hints positive sign for Friday's US jobs report

US ISM Manufacturing PMI employment sub-component rises from 53.7% to 54.5% in May.
Our NFP leading indicators table shows a mixed picture ahead of the highly-NFP-correlated Wednesday hard data releases.

Jordi Martínez FXStreet

The employment picture in the United States turns a bit greener in the manufacturing sector, according to the Employment Index in the Institute for Supply Management survey for the month of June. The ISM Manufacturing PMI shows a continuously improving picture in the labor market, as the Employment Index surged from 53.7% to 54.5%, the second month in a row with a positive outcome. The full Manufacturing PMI declined just a tad from 52.1 to 51.7 but still performed better than expectations, as it was forecasted to fall down to 51.0.

Our fundamental analysis guide to trade the US jobs report classifies the US ISM Manufacturing PMI employment sub-component as one of the ten leading indicators that provide some hints of the status and trend of the labor market. According to our NFP crash course, "the index is expressed in percentage terms, and a higher reading means the majority of respondents’ comments indicate optimism about business conditions and the overall economy, a case for a strong NFP". Also, "some analysts suggest that the Manufacturing ISM has a closer relationship with payrolls, as jobs in this sector can be easier to measure".

US jobs report pre-release checklist – JuL 5th, 2019

Previous Non-Farm Payrolls	Negative	Disappointing report with just 75k jobs added and negative revisions for prior months
Challenger Job Cuts	-	To be published on Wednesday July 3rd at 12.30 GMT
Initial Jobless Claims	-	To be published on Wednesday July 3rd at 12.30 GMT
Continuing Jobless Claims	-	To be published on Wednesday July 3rd at 12.30 GMT
ISM Non-Manufacturing PMI	-	To be published on Wednesday July 3rd at 14 GMT
ISM Manufacturing PMI	Positive	The Employment sub-index in the Manufacturing PMI grew 0.8% in June, from 53.7% to 54.5%.
University of Michigan Consumer Confidence Index	Neutral	UMich Consumer Confidence retraced a bit from last month's decade-highs, but still sitting comfortably on the high-end of a long-term uptrend.
Conference Board Consumer Confidence Index	Negative	The Conference Board Consumer Confidence stumbled last month, falling by 13 points to just above the 120 level seen in January during the last US government shutdown.
ADP Employment Report	-	To be published on Wednesday July 3rd at 12.15 GMT
JOLTS Job Openings	Positive	Job openings stayed at 7.5M in April, still very close to the multiyear highs seen earlier in the year.

Five more indicators, with the better-correlated-to-NFP ADP Employment Report and Jobless Claims among them, are yet to be released on Wednesday before Friday's full employment report, so there's still plenty of inputs to get on the NFP Leading Indicators table. As of now, the picture looks quite mixed, with this Manufacturing PMI survey being the most positive signal with the healthy numbers shown in the JOLTS Job Openings. The University of Michigan Consumer Confidence is also doing alright, just retracing a bit from multi-year highs.

On the other hand, the dismal jobs report from last month and the very disappointing Conference Board Consumer Confidence released last week add some negative signs to the picture.

Author

Jordi Martínez

FXStreet

Jordi Martínez is the Editor in Chief at FXStreet, leading editorial operations at the company, before being promoted to the role in 2023, he worked in several editorial positions at FXStreet, including roles as Senior Editor and

GBP/USD declines as market caution lifts US Dollar

GBP/USD extends its gains for the second successive day, trading around 1.3200 during the Asian hours on Wednesday. The currency pair depreciated as the US Dollar gained momentum, driven by a combination of robust domestic economic data and a complex, mixed geopolitical landscape.

EUR/USD weakens below 1.1400 as Fed hike bets lift US Dollar

The EUR/USD pair trades on a negative note near 1.1380 during the early Asian trading hours on Wednesday. The major pair extends the decline as traders continue to assess the developments surrounding the US-Iran peace deal.

Gold retains bearish bias near two-week low as Fed hike bets support USD

Gold recovers slightly from a fresh two-week low, near $4,080 touched during the Asian session on Wednesday, though it lacks follow-through. The US Dollar stands firm near its highest level since May 2025 amid firming expectations of a Fed rate hike, which, in turn, is seen undermining the non-yielding bullion. Furthermore, mixed US-Iran signals over Tehran's nuclear issues favor the USD bulls, suggesting that the path of least resistance for the commodity remains to the downside.

Australia CPI set to show inflation accelerated again in May

The Australian Bureau of Statistics will publish the high-impact Consumer Price Index for May on Wednesday at 01:30 GMT. Heading into the inflation test, the Australian Dollar is at its lowest level in two months against the US Dollar, having surrendered the 0.7000 psychological mark.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.