Greetings,
We begin with several updates on the United States.
1. The ADP private payrolls report beat consensus, suggesting that the 175k nonfarm payrolls number expected on Friday is realistic.
However, June ADP report also showed the first decline in private construction jobs since 2010.
Moreover, the “goods-producing” sector payrolls have declined sharply.Â
Related to the chart above, the ADP report showed manufacturing jobs getting whacked.
Source: ADP
Separately, here is an update on the help wanted online (HWOL) index discussed yesterday. A Daily Shot reader pointed out a Fed paper which discusses the key reason for the decline in online job postings – and it has little to do with the jobs market. It turns out that a significant portion of this decrease is due to Craigslist jacking up its prices to advertise job openings.
Source:Â FRB, @slapdash__Â
2. Some wonder why US productivity growth has been so weak. Here is part of the answer: soft and declining Capex.
Source: @jpmorganfunds, @MarathonWealth
And here is what happens when you have fewer workers plus poor productivity growth.
Source: @jpmorganfunds, @MarathonWealth​
3. US 10-yr real rate just went negative while the 5-yr rate moved to the lowest level since 2013. This trend tells us that the “effective” monetary policy in the US is quite accommodative.
4. The 30y treasury yield hit another record low.
By the way, below are US bond yields going back to 1800. Nominal rates have never been as low as they are now.
Source: â€@MatthewPhillips
5. Related to the above, according to Freddie Mac, US mortgage rates are approaching all-time lows (about 10bp away).
Source:Â freddiemac.com
6. The FOMC minutes mention the word “uncertain” more than ever. And this is before the EU Referendum vote.
Source: â€@NickatFP, Rosenberg
7. Here is a good history of US economic expansions.
Source: @jpmorganfunds, @MarathonWealth​
1. Turning to the UK, the nation’s consumer confidence crashes after the referendum vote.
Â
Source:Â WSJ
2. UK house price appreciation slowed some in June but is still incredibly strong. What happens in July?
3. The 10yr gilts were auctioned off at a record low yield as demand for this paper spiked.
