The economic data released today is confirming what we have been observing from the recent rise in unemployment claims.
- The ADP private sector jobs report came in at 179K instead of expectations of 200K.
- The ISM services survey for April was a pretty big disappointment, it came in at 52.8 vs expectations of 57.5. The really bad part was new orders index fell dramatically to 52.7 fro 64. Even export orders fell. These are of course relative to March so it indicates the rate of increase slowed down dramatically.
I think we are finally getting a picture that the economy is starting to loose momentum. This is not any sign that we will go into a recession but clearly we are not accelerating. The divergences that I pointed out in the treasuries and commodities are also sort of pointing in the same direction. I think this is not a good sign because typically you should be accelerating at this point in the economic expansion. This is not good news for the unemployed because it means jobs growth will remain slow.