Enjoy your three-day weekend at the beach, and get ready for some big-time economic data when you get back.From Credit Suisse:
Consumer Confidence (May): 70.0: We expect Consumer Confidence to reach a three-month high in May. News heard on employment and business conditions from the University of Michigan Surveys of Consumers improved in May. April’s employment report (reported in May) revealed the strongest job gain in nearly a year. Lower stock prices could limit the upside.
ISM Manufacturing/ISM Prices Paid (May): 57.5/82.0: The ISM Manufacturing index is likely to continue to signal a solid expansion in May, albeit at a slower pace. We expect the headline number to come down to 57.5 after four consecutive readings above 60. Since 1985, there are 14 months that printed at 60 or above – that’s 4% of the time. The long-run average for the headline index is about 52. One upside risk to our forecast is Supplier Deliveries. It could come in stronger as a result of flooding in the South (an increase in the index is reflective of slower delivery times). We expect the Prices index to remain elevated, but come down from April’s three-year high as commodity prices came off recent highs.
And then of course…
Non-Farm Payrolls/Private Payrolls (May): 185K/200K & Unemployment Rate/Average Hourly Earnings: 8.9%/0.2%: Job growth should moderate in May. Nonfarm payrolls should rise 185K and private payrolls should advance 200K. Both would be the smallest gains in four months. Fundamental and technical reasons are behind our view. labour income (private jobs x hours x hourly wages) should continue to grow at a good clip in May (0.4% for aggregate weekly payrolls), but higher prices have eaten into purchasing power. Nominal paychecks should post a 5.5% 3m/3m annualized increase in May. After adjusting for inflation, however, real paychecks should be down -0.1% on the same basis. Please see the full report for more details.
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