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Strong or Improving
Inconclusive or lacking trend
Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.

Weekly Macro Updates

Unemployment Rate (Jun) 3.6% est., 3.7% actual, 3.6% prior
Initial Jobless Claims (Jun 29) 223k est., 221k actual, 229k prior: R+
Continuing Claims (Jun 22) 1675k est., 1686k actual, 1694k prior: R+
ADP Employment Change (Jun) 140k est., 102k actual, 27k prior
Change in Nonfarm Payrolls (Jun) 160k est., 224k actual, 72k prior
Average Hourly Earnings YoY (Jun) 3.2% est., 3.1% actual, 3.1% prior
Labor Force Participation Rate (Jun) 62.8% est., 62.9% actual, 62.8% prior
Underemployment Rate (Jun) 7.2% actual, 7.1% prior
Bloomberg Consumer Comfort (Jun 30) 62.6 actual, 63.6 prior
ISM Manufacturing (Jun) 51.0 est., 51.7 actual, 52.1 prior
ISM New Orders (Jun) 52.5 est., 50.0 actual, 52.7 prior
Markit US Composite PMI (Jun F) 51.5 actual, 50.6 prior
Durable Goods Orders (May F) -1.3% est., -1.3% actual, -1.3% prior

Capital Market Implications

While recent focus has been on the Fed and the potential for rate cuts to sustain the current expansion, last week’s strong payroll numbers dampened expectations of how much the Fed might cut, if at all.  Overall employment growth is still trending lower, but both government and private payroll growth was better than expected in the June report.  Manufacturing and construction jobs also increased modestly.  The unemployment rate edged up, driven by an increase in the labor force participation rate.  Average hourly earnings increased slightly since the last report, with a year-over-year change of over 3%, but wage growth has trended down since earlier in the year.

The holiday shortened week was largely positive for the markets.  The S&P 500 Index ended the week up 1.7% while the Dow Jones Index returned 1.3%.  Small cap stocks gained 0.6%.  Growth continued to outperform value, with the Russell 1000 Growth Index up 2.1% while the comparable value benchmark gained 1.3%.  International markets also ended the week on a positive note, with developed markets gaining 0.5% and emerging markets returning 0.7%.  Bonds were mixed for the week, with the Aggregate Index down -0.2%.  Corporate bonds lost -0.1% while municipal markets were slightly positive, returning 0.1%.  High yield bonds saw the best performance for the week, gaining 0.3%.