Evidence demonstrates modest economic growth occurred in 2Q23 as manufacturing contracted but was more than offset by expansion in the services sector particularly in Consumer facing industries such as Leisure and Hospitality. Attention turns now to 2nd quarter accounting and a refined second half outlook with bank reporting season beginning this week.
The June Employment Situation report (July 7) found 209k net jobs added in the month. The more modest number walked back some of the reaction that occurred following the outsized ADP number earlier in the week. The NFP strength of the prior months was revised lower by a net -110k jobs. Comparisons between the BLS surveys did not show the same variance in actual employed as was seen in May. In my opinion, the report details left arguments for the anticipated +1/4 point hike in Fed Funds at the July meeting unchanged.