{"id":1512,"date":"2019-05-01T12:16:28","date_gmt":"2019-05-01T16:16:28","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1512"},"modified":"2019-05-01T12:16:28","modified_gmt":"2019-05-01T16:16:28","slug":"april-manufacturing-activity-private-sector-jobs-and-march-construction-spending","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1512","title":{"rendered":"April Manufacturing Activity, Private Sector Jobs and March Construction Spending."},"content":{"rendered":"\n

KEY DATA:<\/strong> ISM (Manufacturing): -2.5\npoints; Orders: -5.7 points; Employment: -5.1 points\/ ADP Jobs: +275,000\/\nConstruction: -0.9%<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe slowing manufacturing sector needs to be\nwatched carefully as income gains are not strong enough to support solid\ngrowth.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  Today we get a Fed decision on rates and a\npress conference, while on Friday, the April jobs report will be released.  So, should we be concerned with the days data\ndump?  Yes!  First, the Institute for Supply Management reported\nthat manufacturing growth moderated in April. \nThe overall index was the lowest in over two years and there were sharp\ndeclines in the growth of new orders and in hiring.<\/em><\/strong>  The good number in the report was backlogs,\nwhich continued to expand.  The filling\nof order books should mean that production would remain solid.  Basically, this report says that while manufacturing\ncontinues to expand, the pace is slowing and that may a signal that so is the\neconomy.<\/em><\/strong> <\/p>\n\n\n\n

We normally look to the ADP estimate of job gains\nfor some guidance on the government\u2019s employment report.  However, this month, that is not the case.  The reason is that the<\/em><\/strong> chemist, I mean economist\nbehind the estimate indicated there were several factors that may have led to\nan overstating of the gain. <\/em><\/strong> Being an economic data chemist myself, I get\nit.  Sometimes, the models don\u2019t work\nquite right and you either use judgment and adjust the data or go with the\nresults.  He went with the results and\nthat is fine since he did qualify the numbers. \nThat said, the report was huge, led by an enormous rise in construction\npayrolls.  Leisure and hospitality also\nhired like crazy as did firms in the education and health and professional and\nbusiness sectors.  All sizes of business\nadded workers solidly, but mid-sized firms went all out<\/em><\/strong>.  In any event, let\u2019s just wait and see what\ncomes out Friday.  My number is in the\n165,000 range.<\/p>\n\n\n\n

Construction hit a rough spot in March as activity\nfell.  There were almost no major sectors\nthat posted gains as private and government, residential and nonresidential spending\nwere all off from February levels. <\/em><\/strong> Weather is\nalways a wild card when it comes to construction, so again, let\u2019s wait and see\nbefore getting too concerned.  Still,\nthis is another sector that must be watched. \n  MARKETS AND FED\nPOLICY IMPLICATIONS:<\/strong>The\nFed is likely to continue to take a \u201cwait and see, data will drive our\ndecisions\u201d stance when the statement is released.  Chair Powell will try to be as neutral as\npossible in his press conference and in reality, he has good reason to be\nso.  The strong first quarter growth\nnumber was largely puff<\/em><\/strong> as the two key sectors, household and business\nspending, were soft.  Inflation\nhas faded and is running below target.<\/em><\/strong>So, there is no reason to threaten to hike rates anytime soon.  At the same time, it is hard to argue that\nthe economy needs a boost, so cutting rates makes absolutely no sense.<\/em><\/strong>  Therefore, don\u2019t expect the Fed to move the\nmarkets in any direction.  That may not\nmake the president happy, but it is not the job of the Fed to do the\npresident\u2019s bidding.  As for investors,\nthey should like what the Fed says, but they will also watch the earnings\nnumbers carefully.  It looks like profits\nhave been good, while the economy is remains solid, so that there is no reason\nto think we are in for a major period of market volatility.  Of course, if the trade talks with China fall\napart, all bets are off.  Don\u2019t rule that\nout as improving Chinese economic data mean they have less reason to cave to\nU.S. demands.  \n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ISM (Manufacturing): -2.5 points; Orders: -5.7 points; Employment: -5.1 points\/ ADP Jobs: +275,000\/ Construction: -0.9% IN A NUTSHELL:  \u201cThe slowing manufacturing sector needs to be watched carefully as income gains are not strong enough to support solid growth.\u201d WHAT IT MEANS:  Today we get a Fed decision on rates and a press conference, … Continue reading April Manufacturing Activity, Private Sector Jobs and March Construction Spending.<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1512","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1512"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1512\/revisions"}],"predecessor-version":[{"id":1513,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1512\/revisions\/1513"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}