The Bottom Line

For the most part, the economy advanced in May and June, albeit unevenly and slowly. The manufacturing sector is showing signs of relief although there is no question that the recovery in capital spending is not meaningful. Furthermore, the labor market was generally stagnant during the second quarter with only minor gains in employment. The private workweek and the factory workweek both posted gains in June and this bodes well for employment down the road. Motor vehicle sales increased in June but not enough to satisfy automakers, which introduced 0-percent financing on many (although not all) models.

Market players are generally considering that the Fed rate hike won’t come before November given the current state of the labor market.