Please consider the ADP National Employment Report for June.

Goods-Producing Highlights

• Natural resources/mining 69,000
• Construction 97,000
• Manufacturing -42,000

Service-Providing Highlights

• Trade/transportation/utilities 90,000
• Information -30,000
• Financial activities -16,000
• Professional/business services -5,000
• Education/health services 74,000
• Leisure/hospitality 232,000
• Other services 28,000

Key Comments

• Job creation surged in June, led by consumer-facing services. Leisure and hospitality, trade and transportation, and education and health services showed strong gains. Still, the market was fragmented, with manufacturing, information, and finance showing declines.
• “Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said Nela Richardson, chief economist, ADP. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”

ISM Services Rebounds Sharply, Prices Rise 73 Straight Months

(Click on image to enlarge)

Chart and excerpts below by permission from the Institute for Supply Management® ISM® 

Earlier today I noted ISM Services Rebounds Sharply, Prices Rise 73 Straight Months

Divergences

• GDP vs GDI: Largest Discrepancy Between GDP and GDI in 20 Years
• Jobs vs Employment: Jobs Grow by 372,000 but Employment Shrinks by 315,000

ISM is another divergence in this strangest of strange economies. ISM manufacturing signals a recession that isn’t here unless Gross Domestic Income (GDI) is correct.

We have not seen an economy anything like this one for something like forever.

ADP Report Adds to the Divergences

Manufacturing, Information, Financial Activities, and professional and Business Services are all struggling according to this report.

Yet, the overall picture is sure to increase talk of more rate hikes by the Fed.

Bond yields are up across the board with the 10-year yield, 5-year yield, and 30-year yield up 11, 14, and 10 basis points respectively.

The major US stock market indexes, DOW, Nasdaq, and S&P 500, are down about one percent each.

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