Last week’s news was evenly divided between good and bad release. Starting with the negative, there is Friday’s jobs report: the headline figure was a paltry 138,000. Adding to the bearishness was the 60,000 decline in previous month’s growth. There are other negative elements starting with weak wage and hourly earnings growth:

The percentage of people unemployed for 27 weeks or longer is still very high:

Retail employment is limping along: 

Finally, the 3 and 6 month moving averages of establishment job growth are all declining:

Secondly, auto sales are still weaker than levels over the last 6-12 months; they declined to a 16.6 million level.

But there were several positive news items, beginning with Tuesday’s report on personal spending. This was very positive, especially in light of weaker first quarter numbers. PCEs increased 2.6% Y/Y; durable good spending was 7% higher; non-durable goods purchases rose 1.9% and service spending increased 2.1%. The PCE price deflator was slightly lower; the overall measure declined .2 to 1.7% and the core number was .1 lower, falling to 1.5%.  Because consumer spending is responsible for 70% of U.S. growth, this report points to a far stronger 2Q GDP number. 

Finally, the ISM manufacturing report increased .1% to 54.9. New orders and employment increased. While production decreased, it’s still a very health 57.1.  And the anecdotal comments were very encouraging: