 Re: June Employment Data
The Institute for Supply Management (formerly known as the National Association of Purchasing Managers, or NAPM) released its June Report on Non-Mfg Business this morning. While the overall index was down a bit, to 48.2 from 51.7, some of the details were considerably more interesting.
The employment index for June was 43.8 versus 48.7 in May, suggesting the decline in employment in service industries accelerated in June. (In its previous ROB for manufacturing, the employment index for manufacturing businesses declined to 43.7 from 45.5, also suggesting an acceleration in unemployment.)
However, in todays unemployment report from BEA, service providing business reported a net gain of 7k jobs. Gains were reported in education and health care (+29k), leisure and hospitality (+24k) and government (+29k). Declines were noted in retail trade (-8) and professional and business services (-51k).
To be sure, both the ISM reports and the unemployment data are the product of surveys with an unknown amount of overlap and timing differences, so there is considerable room for error. Nonetheless, the contrast between ISM Non-Mfg declines in employment and the essentially unchanged levels in the BEA service sector data are interesting.
Given the continuing in increases in initial claims data (+16k to 404k for week ended June 28), and the reports from several states of increases in claims from various service areas, the prospects seem to argue for further declines in employment, including the services sector. |