Weekly Economic Update

For the week of June 4 – 8.

The US economy added 223k jobs in May, exceeding expectations of 190k. Construction jobs increased by 25k, manufacturing increased by 18k, and service providers increased by 171k. Auto and parts makers and temporary help services experienced a decrease in jobs. Average hourly earnings increased 2.7 percent from the prior year, exceeding expectations of 2.6 percent. The number of people employed increased by 293k, and the number of people unemployed decreased by 281k. As a result, the unemployment rate dropped to 3.8 percent from 3.9 percent. The unemployment rate has never been this low since April 2000.

Markit Canada Manufacturing PMI’s in May increased to 56.2 from April’s 55.5, making it the highest reading since April 2011. The new orders component rose to 57.6 from 55.7 in April, marking a twentieth straight month of expansion. However, the employment component decreased to the lowest reading since December 2017. Meanwhile, the US PMI fell slightly in May to 56.4 from April’s 56.5. New orders in May decreased to 58 from April’s 58.8.

ISM Manufacturing in May exceeded expectations, coming in at 58.7 versus the expected 58.2. The new orders component rose to 63.7 from 61.2, while the order backlogs index increased to 63.5, making it the highest reading since 2004. The employment gauge also had its first increase in three months to 56.3 from 54.2. 16 out of the 18 manufacturing industries reported growth in May. No industry had a decrease in employment.

Data releases in Canada this week include international merchandise trade, building permits, housing starts, and the May employment report. Major scheduled releases south of the border include various manufacturing figures, the trade balance, and wholesale inventories.

The Canadian dollar is trading a bit higher from Friday’s market close. Today’s expected trading range is 1.2865 – 1.2965.

Source: Bloomberg

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