- 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.
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
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.
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