The United States Economy is Slowly Getting Better
ADP released their private employment numbers today and they are encouraging. We saw huge declines in employment in both March and April. However, we saw significant job gains in May and now June.
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In March and April, we saw private jobs decline to the tune of -19.711 million. However, we saw private jobs grow by 5.433 million in May and June. So, we are still in a -14.278 million deficit here, but things are slowly improving. In the chart below, I put the number of jobs in a logarithmic scale for charting and ease of comparison purposes, because the job losses were so great in March and April.
United States Bureau of Labor reports that 4.8 million jobs were created in June and that smashes expectations; unemployment rate falls to 11.1%
When I took a look under the hood at the sector breakout of the private job change, it looks like leisure and hospitality industry brought the greatest change with 961 thousand jobs improvement during the month. Construction and trade/transportation/utilities sectors performed second and third best, respectively. See the chart below.
With the just released ISM PMI Manufacturing survey data, I get corroborating evidence that our economy is improving. Manufacturing is a leading economic indicator and represents ~10% of the U.S. economy With the June index level of 52.6, that means that this sector is expanding. With the rate of change of the index improving ~22%, this means that this sector of our economy is accelerating. In a matter of fact, this June 2020 reading is better than the June 2019 reading. See the chart below
My analysis of the services sector of the U.S. economy, shows similar gains in June as the manufacturing sector of the economy showed. This index represent ~80% of the economy. The reading in June at 57.1, means that services are now growing and the reading is higher than June of 2019. With the rate of increase coming in at ~25%, it looks that this broad based measure of our economy is accelerating.
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