Merk Investments: ISM Non-Manufacturing Mixed

The May estimate of economic activity in the service sector suggested that service sector might be seeing a bit of a modest bounce, probably due to a temporary increase in spending linked to the rebate checks that begin to arrive in the early portion of the month. Overall the data was mixed with the seven of the eleven indicators suggesting expansion in the service sector.

However, the fall in the employment category back into terrain suggesting contraction stands in stark contrast with the ADP employment report that implied an addition of 77K jobs in the critical service sector that accounts for nearly 90% of the overall economy and 60% of all personal consumption. This implies that ahead of the crucial non-farm payrolls report to be released Friday June 6 that the negative trend in the labor sector should continue and we anticipate that -65K jobs will be lost in May.

Joseph Brusuelas
Merk Investments
Chief Economist/VP Global Strategy

This report was prepared by Merk Investments LLC, and reflects the current opinion of the author.  It is based upon sources and data believed to be accurate and reliable.  Opinions and forward looking statements expressed are subject to change without notice.  This information does not constitute a solicitation or an offer to buy or sell any investment product, nor provide investment advice. Merk Investments does not own any of the stocks mentioned; this is not an offer to buy or sell any security mentioned.