If Unrevised, Job Gains in May Will Mark the Smallest for the Expansion
Man reading newspaper with the headline Job Market. (Photo: AdobeStock)
The ADP National Employment Report said the U.S. private sector added only 27,000 jobs in May, far less than the consensus forecast. The total number of payrolls added for April was revised down slightly to a still solid 271,000.
Prior
Prior Revised
Consensus Forecast
Forecast Range
Actual
ADP Private Payroll ∆
275,000
271K
175,000
125,000 to 190,000
27,000
“Following an overly strong April, May marked the smallest gain since the expansion began,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Large companies continue to remain strong as they are better equipped to compete for labor in a tight labor market.”
The goods-producing sector lost a total 43,000 in May. Construction shed -36,000, while manufacturing and mining/natural resources lost -3,000 and -4,000, respectively.
Meanwhile, the service-providing sector added a total 71,000 jobs in May. Education and health services led the way with 33,000, a result of health care/social assistance adding 34,000 and education losing -1,000.
“Job growth is moderating,” Mark Zandi, chief economist of Moody’s Analytics, said. “Labor shortages are impeding job growth, particularly at small companies, and layoffs at brick-and-mortar retailers are hurting.”
Small businesses with 1 to 49 employees lost -52,000, while medium businesses with 50 to 499 employees added 11,000. Large businesses with 500 or more employees added 68,000.
Retail Sales for May Will Get Significant Contribution from Motor Vehicle Sales
Buying American Made Cars. Supporting the American auto industry and economy photomontage with automobiles and the American Flag. (Photo: AdobeStock)
U.S. light vehicle sales rose 6.2% to a seasonally-adjusted 17.40 million units, beating the consensus forecast and reversing the 6.1% decline in April. Year-over-year sales are now up 1.2% (SAAR), Autodata Corporation reported.
Industry production 4.0 and technology concept, depicting factory production on a conveyor belt with factory operational workers in uniform. (Photo: AdobeStock)
Factory orders decreased $4.0 billion in April or 0.8% to $499.3 billion, meeting the consensus forecast. New orders gained 1.3% in March and have been down two of the last three months, the U.S. Census Bureau reported today.
Prior
Prior Revised
Consensus Forecast
Forecast Range
Actual
Factory Orders – M/M ∆
1.9%
1.3%
-0.8%
-1.3% to -0.3%
-0.8%
Shipments, down following two consecutive monthly increases, decreased $2.7 billion or 0.5% to $504.1 billion. This followed a 0.2% March increase.
Unfilled orders, down two of the last three months, decreased $0.6 billion or 0.1% to $1,179.3 billion. This followed a 0.1% March increase. The unfilled orders‐to‐shipments ratio was 6.69, up from 6.61 in March.
Inventories, up seven of the last eight months, increased $1.8 billion or 0.3 percent to $692.9 billion. This followed a 0.4% March increase. The inventories‐to‐shipments ratio was 1.37, up from 1.36 in March.
State Bar Cites “Reasonable Probability” CNN’s Favorite Trump-Hating Attorney Will Be Disbarred
Michael Avenatti after a federal bankruptcy court judge in Southern California ordered him to pay $10 million to a former colleague who claims the firm misstated its profits.
On Monday, the California State Bar filed a 573-page petition with the State Bar Court to suspend Los Angeles attorney Michael Avenatti, citing “reasonable probability” he will be disbarred. In total, Mr. Avenatti faces more than 400 years in federal prison for numerous charges in coast-to-coast indictments.
The California State Bar cited “substantial harm” in their petition to place Mr. Avenatti — CNN and NBC’s favorite Trump-hating lawyer — on involuntary inactive status, pursuant to California Business and Professions Code 6007(c)(1)-(3).
Mr. Avenatti faces 335 years in prison as a result of a 36-count indictment returned by charged with perjury, fraud, tax evasion, embezzlement and a series of other financial crimes. In April, a federal grand jury in Santa Ana alleged Mr. Avenatti stole millions of dollars from five clients and attempted to use shell companies and bank accounts to cover it up.
The 48-year old Los Angeles lawyer–a political and legal enemy of the president, who just recently enjoyed the status of media darling–was once considered a potential candidate for the 2020 Democratic nomination.
He faces another 47 years in federal prison on another indictment in New York. Prosecutors allege he tried to extort more than $20 million from Nike. Yet another separate indictment in New York was returned for allegedly defrauding his former client, adult-film star Stormy Daniels.
This section of statute, amended by the Legislature on January 1, 2019, authorizes the Office of Chief Trial Counsel to file a petition for involuntary inactive enrollment of an attorney when there is sufficient evidence to show that the attorney caused or is causing substantial harm to the attorney’s clients or the public and there is a reasonable probability both that the Chief Trial Counsel will prevail on a related disciplinary matter and that the attorney will be disbarred.
Mr. Avenatti has 10 days from the service of the petition to file a response and request a hearing. Otherwise, he waves his right to a hearing. If a hearing is requested, the State Bar Court will schedule a date for the hearing.
If no hearing is held, the State Bar Court must file its decision within 30 days of submission. Updates involving the petition and proceedings will be posted to his attorney licensee profile page.
Mr. Avenatti did not respond to requests for comment and has now locked his very active Twitter account.
PMI: Underlaying Strength in New Orders, Production and Employment Continue
Manufacturing industry production concept, depicting factory production on a conveyor belt with factory operational workers in uniform. (Photo: AdobeStock)
The Institute for Supply Management (ISM) Manufacturing Index (PMI) came in at 52.1 in May, indicating underlaying strength but less than the forecast.
Prior
Consensus Forecast
Forecast Range
Actual
ISM Manufacturing Index
52.8
53.0
51.5 to 54.0
52.1
“Comments from the panel reflect continued expanding business strength, but at soft levels consistent with the early-2016 expansion,” Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, said.
“Demand expansion continued, with the New Orders Index strengthening, but remaining in the low 50s, the Customers’ Inventories Index remaining at a ‘too low’ level, and the Backlog of Orders Index contracting for the first time since January 2017.”
The New Orders Index came in at 52.7%, an increase of 1 percentage point from the April reading of 51.7%. The Production Index posted at 51.3%, a 1-percentage point decline from April’s 52.3%. The Employment Index rose to 53.7%, a 1.3% increase from the April reading of 52.4%.
Of the 18 manufacturing industries, 11 reported growth in May, in the following order: Printing & Related Support Activities; Furniture & Related Products; Plastics & Rubber Products; Textile Mills; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Machinery.
“While the headline number is a moderate decline from the 52.8 reading in April, it remains above the expansion/contraction threshold of 50.0,” said Tim Anderson, an analyst at TJM Investments at the New York Stock Exchange (NYSE). “It is also worth noting that a couple key components of the report, Prices Paid and New Orders both rebounded from sharp declines in April.”
“Thus, activity by purchasing managers in the manufacturing sectors of the economy, remains on the upswing, but at a slower rate than we have seen in the last few quarters.”
The six industries reporting contraction in May — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Wood Products; Paper Products; and Fabricated Metal Products.
“Respondents expressed concern with the escalation in the U.S.-China trade standoff, but overall sentiment remained predominantly positive. The PMI continues to reflect slowing expansion,” Mr. Fiore added.
In May, the U.S. hiked tariffs on China from 10% to 25%, a sharp increase worth more than $200 billion amid ongoing trade negotiations. The Chinese are hoping to hold out for Joe Biden, even as their economy takes a hit.
Panel Comments
“Sales remain strong. Labor remains tight. Tariffs are having a significant impact on cost of goods. No impact on where we buy our goods.” (Food, Beverage & Tobacco Products)
“Ongoing tariffs [issue is] impacting costs and influencing supplier realignment on country of origin. Border issue is causing delays in imports from Mexico.” (Computer & Electronic Products)
“Business continues to be very strong. Our company and our supply base continue to be challenged getting manpower for production. Key commodity costs like steel have continued to come down. Lead times with suppliers have stabilized after moving out two to three times what they were a year ago. Supply base performance has improved over the last 90 days and stabilized.” (Machinery)
“Newly increased tariffs on Chinese imports pose an issue on a number of chemicals and materials that are solely produced in China. We are expecting increases in raw materials starting June 1.” (Plastics & Rubber Products)
“General slowing due to inventory correction.” (Primary Metals)
New residential construction, hew homes, housing starts, building permits, depicted on blueprints. (Photo: AdobeStock)
Construction spending for April came in at an estimated seasonally adjusted annual rate of $1,298.5, a flat reading (±1.3%) that missed the consensus forecast. That’s 1.2% (±1.5%) below the April 2018 estimate of $1,314.7 billion.
Prior
Revised
Consensus Forecast
Forecast Range
Actual
Construction Spending – M/M ∆
-0.9%
0.1%
0.4%
-0.4% — 0.7%
0.0 %
Construction Spending – Y/Y ∆
-0.8%
-1.2%
During the first four months of this year, construction spending amounted to $386.1 billion, 0.2% (±1.3%) above the $385.5 billion for the same period in 2018.
“While the April gave us a flat reading, the report for March was upgraded significantly to +0.1% from a previously reported -0.9%,” Tim Anderson, analyst at TJM Investments on the New York Stock Exchange (NYSE).”
“It’s also noteworthy that the Dow (^DJI) and S&P 500 (^SPX) have rallied over +0.5% since this and the ISM PMI were released at 10:00 am,” he added. “The Dow now sporting a gain of over +100 points and the S&P 500 is in the green by nearly 10 handles.”
Private Construction Spending
Spending on private construction came in at a seasonally adjusted annual rate of $954.0 billion, or 1.7% (±1.0%) below the revised estimate of $970.4 billion for March.
Residential construction came in at a seasonally adjusted annual rate of $499.3 billion in April, or 0.6% (±1.3%) below the revised estimate of $502.4 billion for March.
Nonresidential construction was at a seasonally adjusted annual rate of $454.7 billion, which is 2.9% (±1.0%) below the revised estimate of $468.0 billion for March.
Public Construction Spending
The estimated seasonally adjusted annual rate of public construction spending was $344.6 billion, which is 4.8% (±2.5%) above the revised estimate of $328.7 billion for March.
Educational construction was at a seasonally adjusted annual rate of $80.0 billion, 2.1% (±2.6%) above the revised estimate of $78.3 billion for March.
Highway construction was at a seasonally adjusted annual rate of $114.3 billion, 6.8% (±8.6%) above the revised estimate of $107.0 billion for March.
Supporters of President Donald Trump hold up Make America Great American and Keep America Great signs A supporter of Donald Trump dons a T-shirt with a new twist on an old joke targeting Hillary Clinton during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)
President Donald Trump will hold a rally on June 18 in Orlando, Florida, to officially announce his second term presidential run. First Lady Melania Trump, Vice President Mike Pence, and Second Lady Karen Pence will join the President at the campaign kickoff.
The campaign is clearly expecting the President to draw a large crowed. The Amway Center in Orlando seats 20,000 people.
The Trump Campaign and the Republican National Committee (RNC) have taken advantage of the President’s ability to draw large crowds by integrating it into their get-out-the-vote (GOTV) operations. That GOTV has been funded by record-high fundraising totals.
In April, Republicans raised a record $15.9 million after hauling in $45.8 million in the first quarter (Q1) of 2019. Democrats only raised $6.6 million, just enough to cover the total $6.2 million in debt.
The Trump Campaign raised more than $30 million for Q1 2019, and had $40.8 million cash-on-hand. The fundraising haul was nearly $10 million more than Q4 2018, and cash-on-hand was nearly 21 times more than the Obama Campaign had at that point in the re-election cycle.
The average donation to the campaign was just $34.26. As People’s Pundit Daily (PPD) previously reported, roughly 98.5% of contributions to the Trump Campaign in Q4 2018 came from donations of $200 or less. That percentage ticked slightly higher to 98.79% in Q1 2019.
“Low-dollar” contributions are defined as $200 or less, and are indicative of grassroots enthusiasm and working-class support.
That fundraising advantage has allowed the committee and campaign to build a permanent data operation. It also enabled them to launch initiatives such as Project GROW, which focuses on grassroots and takes a page from the Obama Campaign in 2012.
It takes a bottom-up approach to distributing resources among states — including Florida — rather than the old GOP model that placed uniform standards from D.C. to every state.
The decision to hold the rally in Florida underscores the importance the Trump Campaign has placed on the President’s adopted home state as it relates to his reelection.
In the last two cycles, big media polls leading up to Election Day have largely favored Democratic candidates statewide, only to prove most inaccurate.
In 2016, President Trump trailed in most statewide polls but carried the Sunshine State by 1.4%. The PPD/Big Data Poll predicted the President would carry the state by 1.6%, or a 2-point margin when rounded.
In 2018, Florida Republicans bucked the Democrat-favored national environment. The Democrats’ once significant voter registration edge is now the slimmest its ever been over the 4-cycle rolling average tracked by the PPD Election Projection Model.
While he trailed in nearly every single poll before Election Day, Governor Ron DeSantis defeated Democrat Andrew Gillum, and former governor Rick Scott unseated former incumbent Democratic Senator Bill Nelson, D-Fla., in a close race that went to a recount.
19 Candidates Meet at Least One Criteria for First Democratic Debate Stage
Graphic concept for Democratic debates, with symbolically red donkeys instead of blue. (Photo: AdobeStock)
Earlier this week, the Democratic National Committee (DNC) tightened the criteria for candidates to qualify to participate in the Democratic debates in September. The announcement, which came without forewarning, is meant to winnow down the crowded field following the first two debates.
To qualify to participate in the first two debates — the first hosted by MSNBC and NBC in June, and the second by CNN in July — candidates only needed 1% support in 3 national or early state polls or 65,000 individual donors, including 200 from 20 different states.
There are 23 candidates vying for the Democratic nomination and a spot on the first debate stage in Miami, Florida. There are 20 total spots available and 10 lecterns for each of the two nights.
The first debate in South Florida is less than one month away, yet key details are still unknown. None of the campaigns have been told whether they will appear on the stage June 26 or 27, nor against whom they will be debating.
Understandably, this uncertainty is leading to anxiety. The events are expecting to garner the largest national audience to date in terms of viewership for a Democratic debate. Campaigns are hoping to get answers to most of those questions in a conference call on Thursday with the DNC.
But it is likely none of them will not know their assigned dates until a few weeks before the debates.
Candidates are practicing short answers given the total 7 to 10 minute time restriction and are preparing for a crowded format by watching clips from the 2016 Republican primary debates.
Meanwhile, trailing candidates are complaining the DNC’s new debate criteria amounts to an arbitrary action. Raising the debate standards for September could block out candidates representing the more moderate wing of the party whose last name does not end in Biden.
To claim a lectern, a candidate must be garnering 2% support in four national or early voting state polls. They must also have 130,000 unique donors to their campaign, including 400 unique donors from at least 20 states.
The new standards favor candidates with large grassroots support, such as Bernie Sanders, the socialist senator from Vermont and 2016 runner-up. That’s by design and is intended to leave the perception the DNC is trying to atone for 2016.
The anti-secrecy group WikiLeaks released thousands of emails proving the party and Corporate Big Media worked together to handicap the primary against Senator Sanders to aide Hillary Clinton.
Spontaneous Reference to Tariffs Matches All-Time High Recorded Last July
Sale, consumerism and people concept – happy family with child and shopping cart buying food at grocery store or supermarket. (Photo: PPD/AdobeStock/Syda Productions)
The Survey of Consumers final reading on consumer sentiment for May came in at an elevated 100.0, slightly missing the consensus forecast. The preliminary reading soared to a 15-year high.
“The late-month decline was due to unfavorable references to tariffs, spontaneously mentioned by 35% of all consumers in the last two weeks of May,” Richard Curtain, chief economist for the Survey of Consumers said.
That’s up from 16% in the first half of May and 15% in April and matches the high recorded last July in response to the initial imposition of tariffs.
Survey of Consumers
Prior
Prelim
Consensus Forecast
Forecast Range
Actual
Consumer Sentiment Index
102.4
102.4
101.5
99.9 — 102.4
100.0
Current Economic Conditions
112.3
112.4
110.0
Index of Consumer Expectations
87.4
96.0
93.5
Worth noting, the tariffs Mr. Curtain referenced impact China, which President Donald Trump imposed after they backed away from a nearly agreed upon trade deal when Joe Biden entered the race for his party’s nomination.
Late Thursday, the President announced new tariffs on imports from Mexico in response to record-high levels of illegal immigration at the southern border.
The year-ahead inflation expectations jumped to 2.9% in May up from last month’s 2.5%. Year-ahead inflation expectations among those who unfavorably mentioned tariffs was 0.5 percentage points higher than those who made no references to tariffs. Importantly, the gain in inflation expectations was recorded prior to the actual increases in consumer prices due to the most recent hike in tariffs. While higher inflation expectations modestly reduced real income expectations, the largest impact was on buying conditions for appliances and other large household durables, which fell to their lowest level in four years. The combination of higher inflation and a slower pace of spending provide conflicting signals for monetary policy. The divergence will further widen if, as is likely, the trade war escalates. Will the Fed risk higher inflation by lowering interest rates, or risk higher unemployment by raising interest rates? This delimma [sic] comes at a time when consumers have expressed the highest level of confidence since 2002 in the government’s ability to keep both inflation and unemployment at reasonably low levels (see the chart). Consumers now judge economic security more important than a faster pace of growth in their personal incomes or household wealth.
Richard Curtain, Chief Economist for Survey of Consumers
The preliminary reading on consumer sentiment for June will be released on Friday, June 14, 2019 at 10:00 am EST.
Meanwhile, The Conference Board reported earlier this week that consumer confidence shot higher for the second consecutive month, rising 4.9 points from 129.2 in April to 134.1 (1985=100) in May.
Personal Income Gained 0.5%, Consumer Spending By 0.3%, Beating Forecasts
American flag and U.S. dollar financial and economy concept. (Photo: AdobeStock)
The Bureau of Economic Analysis (BEA) said personal income gains beat the consensus forecast in April, rising $92.8 billion (0.5%). The reflected increases were fueled by personal interest income, wages and salaries, and government social benefits to persons.
Prior
Consensus Forecast
Forecast Range
Actual
Personal Income – M/M ∆
0.1 %
0.3 %
0.1 % to 0.4 %
0.5%
Consumer Spending – M/M ∆
0.9 %
0.2 %
0.1 % to 0.3 %
0.3%
PCE Price Index M/M ∆
0.2 %
0.3 %
0.2 % to 0.3 %
0.3%
Core PCE price index – M/M ∆
0.0 %
0.2 %
0.0 % to 0.3 %
0.2%
PCE Price Index Y/Y ∆
1.5 %
1.6 %
1.5 % to 1.6 %
1.5%
Core PCE price index – Yr/Yr ∆
1.6 %
1.6 %
1.5 % to 1.7 %
1.6%
Disposable personal income (DPI) rose $69.3 billion (0.4%) and personal consumption expenditures (PCE) gained $40.8 billion (0.3%).
Real DPI increased 0.1% in April and Real PCE decreased less than 0.1%. The PCE price index increased 0.3%. Excluding food and energy, the PCE price index increased 0.2%.
Meanwhile, personal outlays increased $42.7 billion in April (table 3). Personal saving was $990.3 billion in April and the personal saving rate, personal saving as a percentage of disposable personal income, was 6.2%.
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