May 6, 2024
- The Bureau of Labor Statistics reported nonfarm payroll additions of 175,000 for the month of April, slightly below the 6-month moving average of 242,000. The unemployment rate was 3.9%. The unemployment rate has remained in a narrow range of 3.7-3.9% since August 2023.
- The U.S. Treasury yield curve (10-year yield minus the 2-year yield) remains inverted at -31 basis points. After briefly crossing 5% the 2YR retraced to 4.8% following Fed Chair Jerome Powell’s comments on May 1 that the central bank was keeping an eye on the job market. The market appears to have interpreted this to mean the Fed is shifting their focus away from inflation to the labor market.
- The Conference Board’s Leading Economic Index reading was -5.5% in March y/y, an improvement from February’s y/y reading of -6.4%.
- The U.S. ISM Services PMI for April was 49.4%, contracting for the first time since December 2022. A reading above 50 indicates expansion; the sector expanded in 45 of the previous 47 months. 12 out of 18 industries reported growth in April.
- The U.S. ISM Manufacturing PMI for April was 49.2%, contracting again after 1 month of expansion in March following 16 consecutive months of contraction. The manufacturing sector has been in a recession with 14 consecutive months of contraction. 9 out of 16 industries reported growth in April.
- According to the National Association of Realtors, pending home sales were -4.5% y/y in March, in-line with the six-month moving average of -4.4%. The average 30-year mortgage rate is 7.44%.
- The AAII (American Association of Individual Investors) Sentiment Survey reports 38.5% bullish and 32.5% bearish, for a spread of +6% (modestly bullish). The current CNN Fear and Greed index reading is 40 (“fear”), down materially from a reading of 62 (“greed”) one month ago.
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